The nation’s largest law firms continue to cut hiring, and that had a significant impact on salaries for the Class of 2011.
The mean salary dropped from $84,111 for the Class of 2010 to $78,653, a 6.5 percent difference. The median dropped from $63,000 to $60,000, a 5 percent drop, according to a study by NALP, the Association for Legal Career Professionals.
“It is important to understand that the downward shift in starting salaries is not, for the most part, the result of individual legal employers paying new grads less than they paid them in the past,” said James Leipold, executive director of NALP, in the report.
Earlier NALP studies show that 49 percent of employed graduates obtained jobs in law firms — compared with 50.9 percent for the Class of 2010 and 55.9 percent for the Class of 2009. The highest paying jobs at the large firms are getting harder to come by, resulting in more jobs at firms of 50 or fewer attorneys.
“This drop in starting salaries, while expected, is surprising in its scope,” Leipold said.. “Nearly all of the drop can be attributed to the continued erosion of private practice opportunities.”
William Henderson, a law professor at Indiana University Mauer School of Law — Bloomington, wrote on his blog, The Legal Whiteboard, that this is part of a long-term structural change for large law firms. Revenue per lawyer have gone flat since 2007, after years of growth.
“The long term solution — for both law firms and law schools — is for the price of entry level talent to come down to the point where young lawyers are more cost-effective to train,” he wrote .”And that price point is not $160,000. This inflated pay scale (which has supported ever higher tuitions at law schools) only persists because large firms are deathly afraid of adjusting their salary scales and being labeled second rate. So the solution is keep the entry pay high but hire very few law school graduates. This is not a farsighted or innovative business strategy.”
The encouraging news is that the starting salaries of several other legal professions has either improved slightly or stayed the same. NALP found that the median salary for government jobs has remained consistent since 2009, at $52,000. Also, the median salary for public interest organizations, which includes legal services providers and public defenders, rose nearly 4.7 percent from last year from $43,000 to $45,000.