BigLaw Average Salary Growth

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Alex-Trof
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BigLaw Average Salary Growth

Postby Alex-Trof » Tue Feb 22, 2011 4:17 pm

Hi all,

I've searched this forum but couldn't find the answer to a question I have. In one of the discussions on TLS people were debating whether it was viable to live lavishly in California assuming Big Law. Everyone who participated in the discussion seemed to have taken it for granted that an associate there will make 160K/year until retirement and made projections on revenue/expense analysis based on that figure.

My question is why on TLS is it assumed that an associate will be making 160K for the foreseeable future working for Big Law? Looking through Wikipedia (not the best source I know) and some other website referenced here Big Law seems to pay at least few (sometimes more than few) thousand dollars plus bonuses every consecutive year. Is that false or not representative of what really happens and should not be expected? Why is it assumed that, given a person will stay with Big Law, he/she will only earn 160K a year until retirement?

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ScrabbleChamp
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Re: BigLaw Average Salary Growth

Postby ScrabbleChamp » Tue Feb 22, 2011 4:20 pm

Alex-Trof wrote:Hi all,

I've searched this forum but couldn't find the answer to a question I have. In one of the discussions on TLS people were debating whether it was viable to live lavishly in California assuming Big Law. Everyone who participated in the discussion seemed to have taken it for granted that an associate there will make 160K/year until retirement and made projections on revenue/expense analysis based on that figure.

My question is why on TLS is it assumed that an associate will be making 160K for the foreseeable future working for Big Law? Looking through Wikipedia (not the best source I know) and some other website referenced here Big Law seems to pay at least few (sometimes more than few) thousand dollars plus bonuses every consecutive year. Is that false or not representative of what really happens and should not be expected? Why is it assumed that, given a person will stay with Big Law, he/she will only earn 160K a year until retirement?


Pretty much every BigLaw firm does hand out annual raises and bonuses. For the purpose of the above referenced thread, $160k was being used as a best-case-scenario. Chances are, you (in general, not specifically you) are not going to get BigLaw, so counting on that salaray is asinine. If you search enough, you can find several good resources for salaries of BigLaw associates in years 2-7, bonus amounts, etc...

concurrent fork
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Re: BigLaw Average Salary Growth

Postby concurrent fork » Tue Feb 22, 2011 4:22 pm

Alex-Trof wrote:Why is it assumed that, given a person will stay with Big Law, he/she will only earn 160K a year until retirement?

It's not. The NYC lockstep scale is currently something like 160 -> 170 -> 185 -> 210 -> 230 etc. This is base pay, with many firms paying a bonus on top of it.
Last edited by concurrent fork on Tue Feb 22, 2011 4:23 pm, edited 1 time in total.

Anonymous User
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Re: BigLaw Average Salary Growth

Postby Anonymous User » Tue Feb 22, 2011 4:23 pm

I have never seen a discussion on this forum where somebody assumed a big firm attorney would earn 160 until retirement. I have no idea what you are talking about OP.

~thesealocust / accidental anon
Last edited by Anonymous User on Tue Feb 22, 2011 5:27 pm, edited 1 time in total.

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Moxie
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Re: BigLaw Average Salary Growth

Postby Moxie » Tue Feb 22, 2011 4:27 pm

Don't have time to find the link on Abovethelaw.com, but I'm pretty sure it goes:

1st - 160, 2nd - 170, 3rd - 185, 4th - 210, 5th - 230, 6th - 250, 7th - 280
(Assuming NY market associate position, and CA markets must be similar)

I think my lower end numbers are right, but not sure about the last few.

Alex-Trof wrote:Why is it assumed that, given a person will stay with Big Law, he/she will only earn 160K a year until retirement?


It's not. Then again, how many lawyers are still lawyers when they hit retirement age?

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MrPapagiorgio
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Re: BigLaw Average Salary Growth

Postby MrPapagiorgio » Tue Feb 22, 2011 4:28 pm

Lolwut? Who thinks that an associate in Biglaw will make the same amount as he/she did his/her first year? Besides, one does not usually stay at the associate level in Biglaw for an entire career (i.e. 40 or so years). After about 7 years or so, an associate is either offered a partnership or is kindly asked to pursue other options. Furthermore, a second year associate in Biglaw usually gets a raise. So your idea about making 160k/year until retirement is moot.

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Alex-Trof
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Re: BigLaw Average Salary Growth

Postby Alex-Trof » Tue Feb 22, 2011 4:35 pm

Anonymous User wrote:I have never seen a discussion on this forum where somebody assumed a big firm attorney would earn 160 until retirement. I have no idea what you are talking about OP.


viewtopic.php?f=1&t=147878&start=50

It is not explicitly stated, but I felt as if there is an implication that 160K is a ceiling. Nobody who was in favor of OP trying to live in California argued against just using 160K as the only number in the equation and bringing up a point that the salary will eventually grow and the person could potentially live a good life as a Big Law attorney there.

Thanks everybody. Now I know the answer.

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thesealocust
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Re: BigLaw Average Salary Growth

Postby thesealocust » Tue Feb 22, 2011 5:32 pm

Alex-Trof wrote:
Anonymous User wrote:I have never seen a discussion on this forum where somebody assumed a big firm attorney would earn 160 until retirement. I have no idea what you are talking about OP.


viewtopic.php?f=1&t=147878&start=50

It is not explicitly stated, but I felt as if there is an implication that 160K is a ceiling. Nobody who was in favor of OP trying to live in California argued against just using 160K as the only number in the equation and bringing up a point that the salary will eventually grow and the person could potentially live a good life as a Big Law attorney there.

Thanks everybody. Now I know the answer.


[I was the poster you responded to, hit anon accidentally]

Nobody in that thread is assuming 160K is the ceiling. If you're new to researching legal jobs, you need to know that (1) 160,000/year starting salary jobs are difficult to obtain and rare, at least outside of the T14 or so schools (and even within them it's not guaranteed) and (2) keeping such a job is difficult - they are very demanding and many firms with such starting salaries see a majority of the associates gone in 3-4 years, with a single digit percentage staying long enough to make partner.

People run calculations based on 160 because it's a very standard major city starting salary, but the implication is actually the opposite of what you posted: Everyone knows there are lockstep raises. With only a few exceptions, all big law firms raise associate salaries yearly (the scales for some places, like NYC, were posted above). Since most people who get these jobs won't be at them for more than a few years (and basically none will be there for even 10) it makes sense to do calculations looking at what is constant, which is the starting salary. Bonuses fluctuate or disappear, many firms have slightly different raise structures, etc. But it's pretty marginal when you consider attrition rates + taxation on bonuses / salary raises on an already 6-figure base salary.

tl;dr you read the implication wrong, 160 is used for simplicity's sake only

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Alex-Trof
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Re: BigLaw Average Salary Growth

Postby Alex-Trof » Tue Feb 22, 2011 9:53 pm

thesealocust wrote:
Alex-Trof wrote:
Anonymous User wrote:I have never seen a discussion on this forum where somebody assumed a big firm attorney would earn 160 until retirement. I have no idea what you are talking about OP.


viewtopic.php?f=1&t=147878&start=50

It is not explicitly stated, but I felt as if there is an implication that 160K is a ceiling. Nobody who was in favor of OP trying to live in California argued against just using 160K as the only number in the equation and bringing up a point that the salary will eventually grow and the person could potentially live a good life as a Big Law attorney there.

Thanks everybody. Now I know the answer.


[I was the poster you responded to, hit anon accidentally]

Nobody in that thread is assuming 160K is the ceiling. If you're new to researching legal jobs, you need to know that (1) 160,000/year starting salary jobs are difficult to obtain and rare, at least outside of the T14 or so schools (and even within them it's not guaranteed) and (2) keeping such a job is difficult - they are very demanding and many firms with such starting salaries see a majority of the associates gone in 3-4 years, with a single digit percentage staying long enough to make partner.

People run calculations based on 160 because it's a very standard major city starting salary, but the implication is actually the opposite of what you posted: Everyone knows there are lockstep raises. With only a few exceptions, all big law firms raise associate salaries yearly (the scales for some places, like NYC, were posted above). Since most people who get these jobs won't be at them for more than a few years (and basically none will be there for even 10) it makes sense to do calculations looking at what is constant, which is the starting salary. Bonuses fluctuate or disappear, many firms have slightly different raise structures, etc. But it's pretty marginal when you consider attrition rates + taxation on bonuses / salary raises on an already 6-figure base salary.

tl;dr you read the implication wrong, 160 is used for simplicity's sake only


Yeah, I researched most of the things you mentioned in the first paragraph. I was somewhat confused that nobody mentioned lockstep raises thats why I was asking. I guess that makes sense, but, I wast thinking that they would average out the associate salary over the short period of time they stay there on average. However, now, knowing all of this, I have no problem with people using 160k, especially taking into consideration almost an inevitable pay cut associates will be forced to take after exiting Big Law.

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Tangerine Gleam
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Re: BigLaw Average Salary Growth

Postby Tangerine Gleam » Wed Feb 23, 2011 12:04 pm

Was just reading about Boies-Shiller this morning. They're an obvious outlier, but check out these crazy rates:

1st Year: $168k
2nd Year: $180k
3rd Year: $201k
4th Year: $222k

Plus a bonus of $70k+ for lawyers who have been at the firm longer than one year. :shock:

legends159
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Re: BigLaw Average Salary Growth

Postby legends159 » Wed Feb 23, 2011 12:18 pm

Tangerine Gleam wrote:Was just reading about Boies-Shiller this morning. They're an obvious outlier, but check out these crazy rates:

1st Year: $168k
2nd Year: $180k
3rd Year: $201k
4th Year: $222k

Plus a bonus of $70k+ for lawyers who have been at the firm longer than one year. :shock:


lower job security + insane billable expectation + only a handful of equity partners = offsets the higher pay. At least for me.

Plus I think that scale is old. I think first years start at 174k and they get total comp of 1/3 of what they bill.

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Tangerine Gleam
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Re: BigLaw Average Salary Growth

Postby Tangerine Gleam » Wed Feb 23, 2011 12:25 pm

Lower job security at Boies Shiller? Is that just because of the smaller firm size?

I thought they didn't do any layoffs in 2008 and actually increased salaries instead. I understand that they're a money-making machine.

Edit: You're right about insane billable expectations and few partners, though!

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thesealocust
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Re: BigLaw Average Salary Growth

Postby thesealocust » Wed Feb 23, 2011 12:48 pm

Tangerine Gleam wrote:Lower job security at Boies Shiller?


I think they make like 75% offers to SAs, but I could be remembering wrong. Leverage there is huge(r than most big firms) and I think partnership prospects are dim(er than most big firms). Just my vague recollections from days gone by, but the unique (and generous) compensation structure at BS definitely comes with other draw backs to working there.

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clintonius
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Re: BigLaw Average Salary Growth

Postby clintonius » Wed Feb 23, 2011 12:53 pm

I'm guessing part of the feeling that Boies offers less job security comes from the highly-publicized firing of a whopping two associates last year. If you want litigation, I imagine it's a fantastic place to get your feet wet, pay off your loans a little quicker than you could at most places, and move to a boutique (or government?).

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AreJay711
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Re: BigLaw Average Salary Growth

Postby AreJay711 » Wed Feb 23, 2011 12:59 pm

I think it is prudent to use 160K is probably a good long term baseline for financial planning if you don't count on making partner at a biglaw firm. It is what I used to determine rates of return anyway.

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HarlandBassett
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Re: BigLaw Average Salary Growth

Postby HarlandBassett » Wed Feb 23, 2011 2:01 pm

AreJay711 wrote:I think it is prudent to use 160K is probably a good long term baseline for financial planning if you don't count on making partner at a biglaw firm. It is what I used to determine rates of return anyway.

explain yo self.




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