$160k still benchmark salary at largest firms

More large law firms are paying $160,000 to first–year associates, according to a new report by NALP. Thirty-nine percent of large firms pay the prevailing rate of  $160,000, up from 27 percent in 2014.

But the number of firms at this rate is still far below the numbers prior to the recession. In 2009, nearly 66 percent of firms paid $160,000.  Times have changed, the report states.

“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,” the report states. “In addition to elite global firms, there are many firms with more than 700 lawyers that are made up of many smaller regional offices, many of which don't pay the benchmark first-year salary of $160,000, and, as a result, a larger percentage of large law firm starting salaries fall below that mark.”

The benchmark has been $160,000 since 2007, when firms jumped up from $145,000.

The report said that many firms are moving to levels-based salaries.

“A number of firms have moved to a compensation system in which associates move through levels, with compensation decisions within each level primarily based on skills mastered rather than on class year,” the report states. “Firms using a levels-based system typically have three, or sometimes four, levels. In 2015, the median level of compensation within the first level was $145,000 in firms of more than 500 lawyers, and $130,000 overall. The median in the second level of compensation was $185,000 in the largest firms and about $160,000 overall. The respective figures for the third level were $217,500 and $188,000.”

The data comes from 556 law offices. It shows that law firms in the Northeast pay the most, followed by firms on the West Coast.

Some in legal education were critical of the report, including Deborah Merritt, a law professor at Ohio State University. She pointed out that most law school graduates get jobs at small- and medium-sized firms, which are not part of this study.