Entry-level lawyer salaries rise despite COVID, but number of jobs fell


The good news? Well, it’s pretty good news. According to a recent first-year associates’ salary survey done by NALP salaries went up — and considerably so even in the teeth of COVID-19.

The median, as of January 1 of this year, was $165,000. That’s a $10,000 jump from two years ago, which represents a 6.5% increase. That’s well above the rate of inflation in 2020, which was 1.25%.

The not-so-good news? An ABA report shows that 77.4% of graduates of the Class of 2020 were employed in full-time, long-term, bar-passage required jobs 10 months after graduation. That’s down from the 80.6% from the previous class.

COVID gets most of the blame for that. It also ends a six-year streak of increasing employment outcomes.

One of the bigger affects of the pandemic was the delay in bar exams. Many states pushed the test back months later than the traditional July date. So some graduates couldn’t land jobs until they took the all-important test.

The NALP survey, done every two years, found what can only be described as very welcoming new:  Law firms were operating as normal again when it came to compensation. “Despite the fact that nearly 63% of offices reported implementing salary reductions for associates in 2020 due to the impact of the COVID-19 pandemic, all of these offices indicated that salary reductions were no longer in place as of January 1, 2021, thus, ultimately having little to no impact on 2021 salaries.”

That translates to a continued vibrant legal sector, NALP said.

“Despite widespread media reports of austerity measures implemented by law firms during the pandemic, including delays in partner draws and in some cases temporary salary reductions for lawyers, the findings from NALP’s latest Associate Salary Survey show that associate compensation has continued to grow over the last two years, with first-year associate compensation of $190,000 now measured as the most common starting salary, reflecting the continued strength of the legal sector despite a difficult year,” said James G. Leipold, NALP’s executive director.

He was not surprised by the data. “There seems to be a very hot, very tight market for lateral associate talent, and I think that is driving the salary growth in part,” he said.

A number of Big Law firms made $190,000 the benchmark in 2018 and that’s definitely taken root, particularly with firms of more than 700 lawyers. That sizeable dollar figure accounted for 53.3% of salaries in that firm category, NALP reported. For all firms, the $190,000 figure was the most occurring salary as well, at nearly 40%.

Leipold said that salary bump definitely played a role, even if it happened earlier. “When the base jumps as it did to $190K a number of years ago, not all firms and all offices adopt it at once,” he said. “It takes a couple of years to work its way through the market and part of what we are seeing is just the saturation of that $190K base settling in.”

The nation’s larger law firms were the most represented in the survey. Firms of more than 250 lawyers accounted for about 78% of the 572 responses, NALP said.

Salary increases were not consistent when it came to firm size. The biggest spike was seen in firms of 101-250 lawyers, where median first-year salaries went up $15,000 from $115,000 in 2019 to $130,000 in 2021. That was a whopping 13% increase.

Location, location, location … That’s still a major factor when it comes to first-year salaries. NALP’s report includes salary results from 23 cities as well as other states and regions. And talk about a fluctuation. The median salaries range from $115,000 to $190,000.

“Outside some of the largest markets, $190,000 salaries were still not the norm,” NALP said. “Regionally, the highest median first-year associate base salaries were in the Northeast ($175,000), followed by the South and West, both at $170,000. The lowest salaries were in the Midwest ($130,000).”