Inflation and BigLaw Salary Scale

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lawhawk1836

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Inflation and BigLaw Salary Scale

Post by lawhawk1836 » Mon Jun 07, 2021 12:23 am

Should we expect salaries to increase to keep pace with inflation? If so, when/how might we see a bump?

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Re: Inflation and BigLaw Salary Scale

Post by Anonymous User » Mon Jun 07, 2021 7:22 am

I would hope so. IB salaries went up recently and it's getting to a point where BL salary seems to be lagging behind while (many) firms are making unprecedented amounts of revenue

The Lsat Airbender

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Re: Inflation and BigLaw Salary Scale

Post by The Lsat Airbender » Mon Jun 07, 2021 9:30 pm

lawhawk1836 wrote:
Mon Jun 07, 2021 12:23 am
Should we expect salaries to increase to keep pace with inflation? If so, when/how might we see a bump?
$190k happened pretty recently.

In the main, you'd expect market salaries to keep up with inflation but biglaw is just a drop in the ocean of America's economy. Salaries could track, exceed, or fall behind inflation for sustained periods—perhaps your entire career.

Fortunately for biglawyers, the base numbers are already so high that it's pretty easy to just make conservative assumptions when planning for retirement etc.

2013

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Re: Inflation and BigLaw Salary Scale

Post by 2013 » Mon Jun 07, 2021 9:34 pm

I think NY firms will have no choice but to raise now that firms in more affordable cities (Richmond, Raleigh, Charlotte, atlanta, Orlando, etc.) are at the $190 scale. For retention purposes, I think the new york scale needs to go up drastically so that firms with offices in those cities think twice before following in all markets.

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Bosque

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Re: Inflation and BigLaw Salary Scale

Post by Bosque » Tue Jun 08, 2021 7:16 pm

If you look at inflation adjusted numbers the scale is still currenty on the high end of what it has ever been. I highly doubt we see any base salary changes for at least two years. Will be interesting to see if special bonuses stick around this time, but they never have in the past (though they also have not been this standardized).

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soft blue

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Re: Inflation and BigLaw Salary Scale

Post by soft blue » Wed Jun 09, 2021 1:58 pm

Rationale has always been talent retention / acquisition. (Milbank to $190k, e.g., they wanted "better" candidates.) It'll happen when a firm wants to attract "better" candidates at OCI and not before. Wonder who that would be.

I wonder if, after this year, BigLaw comp goes more bonus-heavy. It's individualized-ish (so the firm has the chance to really pay the people who might jump ship who they need to keep), not guaranteed (so it can be walked-back), etc. K&E seems to have some success with this model, JD a bit less so?

Re: inflation adjusting, CPI doesn't reflect rent, etc in HCOL cities and increasing law school debt. NYC rents from 2000->2020 (excluding COVID). The site says a 1st year in 2000, all in, made $160k compared to $202k today. That's a ~25% nominal growth, but I'm certain that the cost of living in NYC went up > 25% between 2000->2020 (ditto SF, DC). We're for sure worse-off today.

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nealric

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Re: Inflation and BigLaw Salary Scale

Post by nealric » Wed Jun 09, 2021 5:44 pm

soft blue wrote:
Wed Jun 09, 2021 1:58 pm
Rationale has always been talent retention / acquisition. (Milbank to $190k, e.g., they wanted "better" candidates.) It'll happen when a firm wants to attract "better" candidates at OCI and not before. Wonder who that would be.

I wonder if, after this year, BigLaw comp goes more bonus-heavy. It's individualized-ish (so the firm has the chance to really pay the people who might jump ship who they need to keep), not guaranteed (so it can be walked-back), etc. K&E seems to have some success with this model, JD a bit less so?

Re: inflation adjusting, CPI doesn't reflect rent, etc in HCOL cities and increasing law school debt. NYC rents from 2000->2020 (excluding COVID). The site says a 1st year in 2000, all in, made $160k compared to $202k today. That's a ~25% nominal growth, but I'm certain that the cost of living in NYC went up > 25% between 2000->2020 (ditto SF, DC). We're for sure worse-off today.
Even on a CPI basis, 2000 was a high water mark for associate compensation. One thing that's a bit different is that things weren't quite so "market" back then. Today, there are almost 100 firms that pay "market" to start. Back then, it was more like today's equivalent of the v20, and pretty much only in NYC proper. But I wouldn't be surprised to see further differentiation between top earning firms and lower tier firms. Paying a 1st year know-nothing associate $200k is a very different proposition when partners are making $4 million/yr compared to when they are making $500k.

Lawperson1892

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Re: Inflation and BigLaw Salary Scale

Post by Lawperson1892 » Thu Jun 10, 2021 12:26 pm

Bosque wrote:
Tue Jun 08, 2021 7:16 pm
If you look at inflation adjusted numbers the scale is still currenty on the high end of what it has ever been. I highly doubt we see any base salary changes for at least two years. Will be interesting to see if special bonuses stick around this time, but they never have in the past (though they also have not been this standardized).
Milbank: . . . and I took that personally

lawhawk1836

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Re: Inflation and BigLaw Salary Scale

Post by lawhawk1836 » Thu Jun 10, 2021 1:54 pm

Lawperson1892 wrote:
Thu Jun 10, 2021 12:26 pm
Bosque wrote:
Tue Jun 08, 2021 7:16 pm
If you look at inflation adjusted numbers the scale is still currenty on the high end of what it has ever been. I highly doubt we see any base salary changes for at least two years. Will be interesting to see if special bonuses stick around this time, but they never have in the past (though they also have not been this standardized).
Milbank: . . . and I took that personally
Got 'em.

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Bosque

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Re: Inflation and BigLaw Salary Scale

Post by Bosque » Thu Jun 10, 2021 2:44 pm

Lawperson1892 wrote:
Thu Jun 10, 2021 12:26 pm
Bosque wrote:
Tue Jun 08, 2021 7:16 pm
If you look at inflation adjusted numbers the scale is still currenty on the high end of what it has ever been. I highly doubt we see any base salary changes for at least two years. Will be interesting to see if special bonuses stick around this time, but they never have in the past (though they also have not been this standardized).
Milbank: . . . and I took that personally

Lol, did not account for Milbank's new managing partner, Jermaine Dupri.

(Could not be happier to be wrong).

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