First-year associate salaries on the rise at large law firms

The National Association for Law Placement (NALP) recently released its 2019 Associate Salary Survey report, showing that the overall median first-year salary as of January 1, 2019, was $155,000, up $20,000 (14.8%) from 2017, the year of the most recent previous survey. This increase comes at the same time that Big Law reported its most successful earnings cycle ever. Law firms of 251+ lawyers accounted for about 70% of responses.

The greatest salary growth was seen in firm sizes of 701+ lawyers, where median first-year base salaries increased $25,000 from $155,000 in 2017 to $180,000 in 2019 (16.1% increase). Some modest growth was seen in firm sizes of 251-500 lawyers, with median first-year base salaries moving from $150,000 in 2017 to $160,000 in 2019 (6.7% increase). Median first-year base salaries in 2019 for firm sizes of 51-100 lawyers ($115,000), 101-250 lawyers ($115,000), and 501-700 lawyers ($160,000) were flat or relatively flat compared to 2017.

Significant findings include:

- When $190,000 first-year salaries were announced in 2018, the impact was similar to that in 2017 when large law firms announced a first-year salary hike to $180,000 - there were still not nearly enough offices reporting a $190,000 salary to push the median up to that level, even in the largest firms. However, $190,000 was the modal, or most frequently occurring, first-year base salary reported, accounting for 29.3% of all reported first-year base salaries. It is also not necessarily surprising that offices paying $190,000 are concentrated mostly within a few cities (including Dallas, the Los Angeles/Orange County area, New York City, and the Washington, DC area).

- The data suggest that as more law firms have grown through acquisition and merger, the largest law firms are not as similar to one another as they used to be. In addition to elite global law firms, there are many firms with more than 700 lawyers that are made up of numerous smaller regional offices, many of which do not pay the new benchmark first-year salary of $190,000, and, as a result, the majority of large law firm starting salaries fall below that mark.

- Regionally, the highest median first-year base salaries reported were in the Northeast and South ($165,000), followed by the West ($160,000), with the lowest in the Midwest ($120,000).

"There has been abundant news coverage of the salary hike to $190,000 for first-year salaries at many of the largest law firms, and we see that reflected in the data collected in this year's salary survey," noted NALP's executive director James Leipold. "As with other associate base pay hikes in the past, while the press focus is usually on how quickly law firms race to meet a market change like this one, the data reveal that there are in fact many large law firm offices that are still not paying $190,000 as a base first-year salary. These hikes often take two or more years to move through the market. They also have the effect of driving up starting salaries in markets that have a lower base, and we see that movement in this year's data as well," he concluded.

Published by NALP since 1996, the 2019 Associate Salary Survey report, available in the NALP bookstore, provides information about associate and summer associate salaries by firm size, region, and the metropolitan area population; detailed salary analyses for 24 major markets; analyses of salaries for offices using a levels-based compensation system; base salaries for class of 2019 associates by firm size and city; salaries for intellectual property lawyers, salaries for law clerks and staff attorneys; and more.

The full 2019 Associate Salary Survey report is available in the NALP bookstore for $160 plus shipping and handling at www.nalp.org/productdetail/?productID=267.

Published: Tue, May 28, 2019