Biglaw Salaries going up?

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exitoptions
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Re: Biglaw Salaries going up?

Postby exitoptions » Fri Apr 17, 2015 3:25 pm

JasonSehorn wrote:
exitoptions wrote:
JasonSehorn wrote:
Anonymous User wrote:going up? not likely. but going down when the bubble in the stock market collapses? very likely.


Going down from what? 160k? That mark was set in 2007 prior to crash. Why would they go down?


Inflation.


They've already gone down from inflation and will continue to do so. 160k today is about 180k or so on 2007.


Exactly. Firms don't need to reduce salaries. Time and the federal reserve are on their side.

ruski
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Re: Biglaw Salaries going up?

Postby ruski » Fri Apr 17, 2015 3:39 pm

what no one here has considered is the growing in-house market. in-house salaries have climbed considerably since 2007, as well as expanded their available positions. it's come to the point where its almost not even worth it to stay in biglaw after 3 or 4 years. after-tax you're looking at a difference of maybe 20k if not less. so the extra ~500 hours you put a year for an extra 20k is probably not worth it, especially considering the diminishing utility of an extra dollar when you're already making ~200k. there is no inventive to stay at a firm really unless you're (a) particularly money-hungry or (b) delusional into thinking you'll make partner.

perhaps if we see an increase in bonuses the difference is greater, but as of now I think not.

Hutz_and_Goodman
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Re: Biglaw Salaries going up?

Postby Hutz_and_Goodman » Fri Apr 17, 2015 3:52 pm

I think what is driving the salary increase momentum is:
-economy is improving, deals are up
-in house salaries are not stagnant
-still a lot of JDs but only so many who can do high level complex work (people with 170+ LSAT have been choosing other careers)

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Cobretti
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Re: Biglaw Salaries going up?

Postby Cobretti » Fri Apr 17, 2015 4:02 pm

Hutz_and_Goodman wrote:I think what is driving the salary increase momentum is:
-economy is improving, deals are up
-in house salaries are not stagnant
-still a lot of JDs but only so many who can do high level complex work (people with 170+ LSAT have been choosing other careers)

In before some moron says a monkey could be a biglaw associate and this is irrelevant

mvp99
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Re: Biglaw Salaries going up?

Postby mvp99 » Fri Apr 17, 2015 4:19 pm

you're all missing the point.. NYC -> 200k

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Big Shrimpin
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Re: Biglaw Salaries going up?

Postby Big Shrimpin » Fri Apr 17, 2015 4:38 pm

don't do law to get rich

do law to get upper-middle class

but if u don't like it u might killself along the way

hth

exitoptions
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Re: Biglaw Salaries going up?

Postby exitoptions » Fri Apr 17, 2015 4:50 pm

Big Shrimpin wrote:don't do law to get rich

do law to get upper-middle class

but if u don't like it u might killself along the way

hth


No, you do law to pay of your law school loans...

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Yardbird
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Re: Biglaw Salaries going up?

Postby Yardbird » Fri Apr 17, 2015 5:51 pm

JasonSehorn wrote:
exitoptions wrote:
JasonSehorn wrote:
Anonymous User wrote:going up? not likely. but going down when the bubble in the stock market collapses? very likely.


Going down from what? 160k? That mark was set in 2007 prior to crash. Why would they go down?


Inflation.


They've already gone down from inflation and will continue to do so. 160k today is about 180k or so on 2007.
I think I got what you meant, but your wording might be incorrect. $160K today has the same buying power as $141K in 2007. $160K in 2007 has the same buying power as $180K today. But I don't disagree with your point that lawyers are being paid less today than in 2007 after inflation is accounted for in salary.

Firms are probably happier to have more of total compensation given out in the bonuses since they can always adjust bonuses from year to year and claim performance is the reason why bonuses are low/high. Lowering salaries will 100% have a huge morale effect on associates, but lowering bonuses won't have as big an impact (ideally). This is more like the investment banking model, but it lets firms make total compensation decisions on a yearly basis without touching base salary.

Internetdan
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Re: Biglaw Salaries going up?

Postby Internetdan » Fri Apr 17, 2015 7:11 pm

Is this a good time to start thinking about unionization

JasonSehorn
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Re: Biglaw Salaries going up?

Postby JasonSehorn » Fri Apr 17, 2015 7:27 pm

Inflation.[/quote]

They've already gone down from inflation and will continue to do so. 160k today is about 180k or so on 2007.[/quote]I think I got what you meant, but your wording might be incorrect. $160K today has the same buying power as $141K in 2007. $160K in 2007 has the same buying power as $180K today. But I don't disagree with your point that lawyers are being paid less today than in 2007 after inflation is accounted for in salary.

Firms are probably happier to have more of total compensation given out in the bonuses since they can always adjust bonuses from year to year and claim performance is the reason why bonuses are low/high. Lowering salaries will 100% have a huge morale effect on associates, but lowering bonuses won't have as big an impact (ideally). This is more like the investment banking model, but it lets firms make total compensation decisions on a yearly basis without touching base salary.[/quote]

Thanks for that, I completely botched the phrasing.

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Big Shrimpin
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Re: Biglaw Salaries going up?

Postby Big Shrimpin » Sat Apr 18, 2015 1:23 pm

exitoptions wrote:
Big Shrimpin wrote:don't do law to get rich

do law to get upper-middle class

but if u don't like it u might killself along the way

hth


No, you do law to pay of your law school loans...


shouldve clarified

dont take out loans - go near-full ride or dont go at all

tcr is just 2 not go at all

Anonymous User
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Re: Biglaw Salaries going up?

Postby Anonymous User » Wed Apr 22, 2015 11:02 pm

FWIW my managing partner has said multiple times that he suspects associate salaries to rise within the next year or two.

Do it Simpson.

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Cobretti
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Re: Biglaw Salaries going up?

Postby Cobretti » Thu Apr 23, 2015 12:53 am

Anonymous User wrote:FWIW my managing partner has said multiple times that he suspects associate salaries to rise within the next year or two.

Do it Simpson.

out the firm please

KM2016
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Re: Biglaw Salaries going up?

Postby KM2016 » Thu Apr 23, 2015 1:26 am

Cobretti wrote:
Anonymous User wrote:FWIW my managing partner has said multiple times that he suspects associate salaries to rise within the next year or two.

Do it Simpson.

out the firm please

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skers
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Re: Biglaw Salaries going up?

Postby skers » Thu Apr 23, 2015 1:29 am

KM2016 wrote:
Cobretti wrote:
Anonymous User wrote:FWIW my managing partner has said multiple times that he suspects associate salaries to rise within the next year or two.

Do it Simpson.

out the firm please NY to 190.

masque du pantsu
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Re: Biglaw Salaries going up?

Postby masque du pantsu » Thu Apr 23, 2015 12:42 pm

I've long been skeptical, but i'm starting to think people might be on to something, maybe even within the next few years. See below:

http://www.bloomberg.com/news/articles/ ... -this-year

Whether or not you agree with the article's recommendations, check out the numbers for point #3: at some point the big law firms will face (or feel that they are facing) a talent crunch.

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JohannDeMann
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Re: Biglaw Salaries going up?

Postby JohannDeMann » Thu Apr 23, 2015 12:49 pm

masque du pantsu wrote:I've long been skeptical, but i'm starting to think people might be on to something, maybe even within the next few years. See below:

http://www.bloomberg.com/news/articles/ ... -this-year

Whether or not you agree with the article's recommendations, check out the numbers for point #3: at some point the big law firms will face (or feel that they are facing) a talent crunch.


a week ago she posted an article that the smartest people are opting out of law schools.

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SplitMyPants
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Re: Biglaw Salaries going up?

Postby SplitMyPants » Thu Apr 23, 2015 12:56 pm

masque du pantsu wrote:I've long been skeptical, but i'm starting to think people might be on to something, maybe even within the next few years. See below:

http://www.bloomberg.com/news/articles/ ... -this-year

Whether or not you agree with the article's recommendations, check out the numbers for point #3: at some point the big law firms will face (or feel that they are facing) a talent crunch.


Who the hell chooses a bar chart with a 120-160 scale to show average LSAT scores through time?

TheOnePercent
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Re: Biglaw Salaries going up?

Postby TheOnePercent » Thu Apr 23, 2015 1:06 pm

masque du pantsu wrote:at some point the big law firms will face (or feel that they are facing) a talent crunch.

Ehh, law isn't rocket science - don't see how a firm's management committee would choose to increase associate salaries b/c the quality of incoming law students in the aggregate is weaker. Just too attenuated.

Firms will respond when they 1) financially can, 2) it's strategically valuable (to distinguish themselves from the market), and 3) are having more issues than normal with elite associate retention.

May have 1 and 2, but not seeing 3.

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FSK
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Re: Biglaw Salaries going up?

Postby FSK » Thu Apr 23, 2015 1:09 pm

And 3) from above doesn't look likely. What else can elite associates do? In-house legal departments are poaching droves of all-stars. Big Banks, Hedge Funds, Private Equity Firms, aren't clamoring for lawyers. There's too much talent and not enough jobs across the entire economy. Real wages aren't really rising for any entry to mid-level employee. Why would large law firms be any different?

masque du pantsu
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Re: Biglaw Salaries going up?

Postby masque du pantsu » Thu Apr 23, 2015 1:56 pm

I was with you, 100%, on this; I still agree it's obvious law firms are having no trouble getting bodies in the door. But the question will be if they see themselves as having an issue getting what they perceive as the *right* bodies in the door, and keeping them there once they're in.

That little news article came to my attention because two partners were discussing it (and talking about how much more important recruiting will become in the next few years) outside my office door.

Forget about salaries in favor of total comp (i.e., bonus included, which they upped this year not just because they could but also to help retention) and it's not that crazy of an idea. Especially given that to some extent, the most prestigious large law firms are all shopping not only the same type of students but literally the same students (think about those people from law school who cleaned up at OCI).

Obv this doesn't mean the market will just suddenly become awesome (more of a rich get richer kinda thing) or even that it would result in "market" becoming >$160, but if a small number of elite law firms start feeling like they need to be more selective (e.g., can't reach as deep w/r/t grade cutoffs, etc.), and they end up recruiting the same small group of students, i don't see why they wouldn't consider competing on comp as well.

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Cobretti
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Re: Biglaw Salaries going up?

Postby Cobretti » Thu Apr 23, 2015 2:47 pm

flawschoolkid wrote:Real wages aren't really rising for any entry to mid-level employee. Why would large law firms be any different?

source?

overall real wages have been increasing

ETA: and obviously we all know that banking entry level wages were raised last year

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FSK
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Re: Biglaw Salaries going up?

Postby FSK » Thu Apr 23, 2015 2:49 pm

Cobretti wrote:
flawschoolkid wrote:Real wages aren't really rising for any entry to mid-level employee. Why would large law firms be any different?

source?

overall real wages have been increasing

ETA: and obviously we all know that banking entry level wages were raised last year


Consider the past 15 years

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Cobretti
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Re: Biglaw Salaries going up?

Postby Cobretti » Thu Apr 23, 2015 2:56 pm

flawschoolkid wrote:
Cobretti wrote:
flawschoolkid wrote:Real wages aren't really rising for any entry to mid-level employee. Why would large law firms be any different?

source?

overall real wages have been increasing

ETA: and obviously we all know that banking entry level wages were raised last year


Consider the past 15 years

http://www.washingtonpost.com/blogs/wonkblog/wp/2013/08/21/between-2000-and-2012-american-wages-grewnot-at-all/

Advanced degrees made solid gains between 2000 and 2012, and the economy has rebounded substantially between 2012 and now.

Anonymous User
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Re: Biglaw Salaries going up?

Postby Anonymous User » Thu Apr 23, 2015 3:11 pm

Love this thread of pure speculation about the impact of economic forces from a bunch of law students and lawyers with (presumably) little to no relevant background. Allow me to contribute my (also baseless) speculation.

The notion that law firms will increase associate compensation in response to reduced quality of law school applicants misses the point. Law firms won't increase compensation. "Law firms" isn't a single entity or a group acting in concert. A law firm might, however, increase compensation. And I don't think it's reasonable to attribute such an increase to that single law firm's motivation to improve the aggregate incoming talent. That single law firm will increase compensation in an effort to improve its incoming talent. The more the aggregate pool of available talent diminishes, the more incentive a law firm has to become more competitive for the available top talent. And in response, other top law firms--who can afford to do so--will match. If aggregate talent has any impact on salary, it will have an impact in this way.

Often people express the notion that "law isn't rocket science," so talent doesn't matter. I think this is misguided. A person falls somewhere on a spectrum of success-oriented skills--reasoning, diligence, motivation, etc. I don't think you should deduce that "law is easy" merely because law seems easy to you and those you know. More likely, and I don't mean any disrespect by this, those who express this notion probably grew up surrounded by relative privilege and success and don't realize where the majority of Americans fall on the spectrum of success-oriented skills. As a first generation college graduate, and someone who grew up in a city where <20% of people hold college degrees, I can tell you that most of the people I grew up around would not find the law easy. And just for the record, rocket science isn't the idiomatic "rocket science," either. It's merely other stuff smart people sit down and learn.

Finally, I think it's worth pointing out that the pressure on associate compensation also comes from attrition to in-house. In-house compensation has seen steady growth since the recession, shrinking the wage gap. At the same time, many in-house departments are growing, so there is more opportunity.

In my opinion, associate compensation will rise. It's just a matter of how soon, and which firms will be able to afford to match the first-movers.




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