The latest salary data shows a steep decline in median private starting salaries — down from $125,000 in 2008 to $104,000 for the Class of 2010. But while some firms are paying less, the real reason for the drop is that the large law firms are hiring fewer associates.
Salaries for new attorneys in public interest, government, academics and judicial clerkships are relatively flat.
Law firms with 251 to 500 attorneys dropped the most, from $160,000 to $145,000. Law firms with 51 to 100 attorneys dropped from $95,000 to $85,500, the greatest percentage change.
But it is important to look at the historical perspective. Even with the recent drops, private practice salaries are still higher than all but four of the last 15 years — even when adjusted for inflation.
In 1994, graduates who entered private practice earned an inflation-adjusted median of $73,550. Those numbers spiked up in 1999 and plateaued in 2001, with an inflation-adjusted salary of $110,880. Salaries declined for the next three years before the most recent climb brought them to a historic high for the Class of 2009.
But when you break salaries down by job type and size of firm, we see that they have been relatively flat for every employer, except for the nation’s largest firms.
It was the growth of the nation’s largest law firms into international powerhouses that fueled the salary bubble that burst in 2009. The percent of recent graduates who landed jobs at firms with more than 100 attorneys dropped this year to its lowest point in 13 years.
It’s almost as if the big firms grew fat on the wild speculation and frenzy of the housing market and financial markets. And then when things came to a halt in 2008, the party was over for the big firms.
Sadly, many law students were hoping to cash in on that party, but arrived too late. That then led to a lot of negativity about law school over the past few years – especially from the so-called scam bloggers.
Employment prospects for recent grads do look dismal when compared to a few years ago. But when we compare the current market to prior decades, things look a heck of a lot better — even good.
So, the bad news is that hiring at the big law firms is off by 35 percent and may not return anytime soon, if at all. Law students who want to cash in on a quick ticket to wealth will continue to be disappointed.
But the rest of the legal market is surprisingly stable, both in hiring and in salaries. And that is very good news for law students who view the legal profession as a career and not as an investment.