The Takeover of Biglaw Elite by the $415K Associate Salary Scale
September 26, 2022
It’s almost official at this point — with only one major firm left to officially Biglaw adopt the $415K associate salary scale, all the major firms will have joined in within the next year or so (the last holdout being Simpson Thacher & Bartlett). With this collective move by the Biglaw Elite, which firms are feeling pressure to be included among the top firms, and how much? We take a look at four of these firms here.
What Makes a Law Firm Amenable to Entry-Level Hires at $415K?
This spring has seen firms announce new associate salaries that reflect the shift from overpriced luxury to competitive price points. Of course, some firms are staying firm in their pricing, though it is unlikely that these Biglaw firms will be able to sustain themselves in this new environment. After all, recent reports show that firms with a high salary-to-debt ratio tend to have a lower share index for satisfaction.
Perhaps this indicates a more critical stance towards retention and recruitment issues faced by many firms – something that seems more likely if they increase partner compensation as part of reform efforts.
10 Signs of a Firm Getting Ready for Its First $400-$420K Hire
#1. Hiring decisions are focused on quality over quantity With law schools experiencing unprecedented enrollment rates and more new attorneys entering the Biglaw legal profession than ever before, firms with hiring committees that focus on quality rather than quantity will be able to take advantage of this glut in lawyers and can be more selective about candidates with unique skills or backgrounds. #2.
Breaking down silos: Big law Firms want generalists and recognize that some previous positions may no longer exist These firms don’t want employees that only know one area; they need people who know two or three areas very well. As a result, they are combining teams across practice groups to form larger, hybrid groups so they can offer clients all-around representation.
Yet Another Sign That Law Firms Are Increasingly Willing to Pay New Associates at $410-$425K
As reported by DealBook, Paychecks have never been as fat in Biglaw, with many of the top-paying firms paying starting salaries in the high $400,000s. The last time we saw this same trend? 2007. So what’s changed? Well for one thing, back then new lawyers couldn’t charge clients a higher rate on their hourly billing rates than they could when they were associates.
Thanks to their fancy law degrees and licensed experience to counsel companies on everything from M&A transactions to labor relations and IP strategy – it was worth bringing these new lawyers in at a heftier pay scale since they’re worth more.
Why It’s Good To Be in a Law Firm When That Law Firm Might Be Willing to Start Hiring Associates at $410-$425K
While the national debate on BigLaw wages has subsided, with attention instead placed on compensating attorneys in other industries more effectively, major law firms across the country are starting to up their scales for first-year associates.
Boston’s WilmerHale is currently testing an associate salary range that starts at $410-$425M (depending on location) and goes up to $425-$450M over five years. Other firms have also announced plans to start up a new scale. And it seems these may be change agents for others in similar markets: In response to the WilmerHale plan, Philadelphia-based Morgan Lewis said they will soon offer starting salaries between $380 and $420 per hour.
What It Means If You Just Got Offered (Or Are About To Get Offered) An Associate Position At A Large National Law Firm At Or Above Salary Scale
Don’t buy into the false sense of security. If you’re offered an associate position at a large national law firm at or above the salary scale, don’t buy into the lie that you’ll have your job for life. This offer is only as good as your skills are and how long you can maintain them, which is fleeting if you work in biglaw.
Don’t settle with just a $400,000-plus offer because most likely you will lose this position eventually because someone cheaper and more skilled will take it from you. The high demand for these positions means they may not be filled forever. Hiring managers are always looking for ways to spend less money, and replacing expensive associates with lower-cost ones is one way to do that.
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