Top Law Schools

So in my research into law school (0L here), I've noticed that pretty much all big law salaries starting off are pretty much the same, $160,000 give or take a couple thousand. All the way from Wachtell down to the less prestigous firms. Why is that? It would seem like the top firms should offer a lot more in terms of pay in order to attract the best talent, right? Obviously that is not the case, and these are my two guesses as to why.

1) Prestige. In and of itself, this is enough to attract the best candidates. Also working for the biggest/most lucrative clients.

2) (And this is the one I would guess is most probable/ factors in more out of the two) Down the line there are much bigger opportunities to cash in. As in, once you make partner at a Cravath your gonna be making boatloads more than most other places.

Are these guesses right? Anywhere close? One more than the other? I've been wondering this for a while, and TLS always knows best, so thought I'd throw it out there- thanks!

jetsfan1 wrote:2) (And this is the one I would guess is most probable/ factors in more out of the two) Down the line there are much bigger opportunities to cash in. As in, once you make partner at a Cravath your gonna be making boatloads more than most other places.

This is why.

And also biglaw salaries are monkey see-monkey do.. hence why it's called "market salary". If Cravath, for example, was to raise it's 1st yr salary then other biglaw firms would follow suit - nullifying the benefit of raising the salary in the first place (differentiating themselves). But since they stay at 160k, everyone else does as well.

Because it is a buyer's market. In most cases the firms choose their associates. Not associates choosing firms.

Tom Joad wrote:Because it is a buyer's market. In most cases the firms choose their associates. Not associates choosing firms.

Lets just be happy that cravath doesn't decide they only want to pay us $120

Tom Joad wrote:Because it is a buyer's market. In most cases the firms choose their associates. Not associates choosing firms.

Right, but my question was more along the lines of if Firm A in the V5 and nonranked Firm B (is that the term? Sorry, again 0L here) offer a student, what is his incentive to choose A over B.

TrialLawyer16 wrote:

jetsfan1 wrote:2) (And this is the one I would guess is most probable/ factors in more out of the two) Down the line there are much bigger opportunities to cash in. As in, once you make partner at a Cravath your gonna be making boatloads more than most other places.

This is why.

And also biglaw salaries are monkey see-monkey do.. hence why it's called "market salary". If Cravath, for example, was to raise it's 1st yr salary then other biglaw firms would follow suit - nullifying the benefit of raising the salary in the first place (differentiating themselves). But since they stay at 160k, everyone else does as well.

Thanks- makes sense. But as to the second part, there has to be some line where if Cravath raised their starting salary to most other firms below them couldn't match, but yeah it makes sense why they wouldn't wanna push the envelope, seeing as they already attract the top talent. Also, how big is this difference down the line, in terms of yearly pay? Thanks again all.

jetsfan1 wrote:

Tom Joad wrote:Because it is a buyer's market. In most cases the firms choose their associates. Not associates choosing firms.

Right, but my question was more along the lines of if Firm A in the V5 and nonranked Firm B (is that the term? Sorry, again 0L here) offer a student, what is his incentive to choose A over B.

For at least 2 reasons I can think of and probably a million I can't think of.

1. Firm rankings aren't like law school rankings. There aren't really consensus rankings of the best places to work in a precise order. Certain people would prefer certain firms over others based on different strengths of practice groups, geography, hours, workplace environment, exit opportunities, partnership prospects, family issues, perceived prestige, etc. If you ask all the members of Harvard's Law Review--people who could probably work anywhere--where they want to work, you would probably get quite a few different answers.

2. Firms don't care that much because the difference between the top 1,000 rising 2Ls in the country and numbers 1,001-2,000 probably aren't that different in their minds.

There are a number of factors at play. The top firms all pay the same because they're competing for the top talent. Slightly smaller firms offer the same pay both to try and attract the top talent (or at least second best) and to signal that they too belong at the big boy table.

For prospective employees, top talent want to work at top firms, because its where the best opportunities are, as long as the money is about the same.

Come OCI, how many students do you think would bid on a firm that pays less than peer firms? Most prospective students barely know the difference between firms, especially once you drop below the V10 range.

Edit: note that there are some big firms that pay less, eg $145k in NYC, and midsize firms might pay a lot less.

jetsfan1 wrote:

TrialLawyer16 wrote:

jetsfan1 wrote:2) (And this is the one I would guess is most probable/ factors in more out of the two) Down the line there are much bigger opportunities to cash in. As in, once you make partner at a Cravath your gonna be making boatloads more than most other places.

This is why.

And also biglaw salaries are monkey see-monkey do.. hence why it's called "market salary". If Cravath, for example, was to raise it's 1st yr salary then other biglaw firms would follow suit - nullifying the benefit of raising the salary in the first place (differentiating themselves). But since they stay at 160k, everyone else does as well.

Thanks- makes sense. But as to the second part, there has to be some line where if Cravath raised their starting salary to most other firms below them couldn't match, but yeah it makes sense why they wouldn't wanna push the envelope, seeing as they already attract the top talent. Also, how big is this difference down the line, in terms of yearly pay? Thanks again all.

Yep. You answered your own question there. Cravath isn't competiting with bottom feeder firms for talent and any peer of Cravath's can match what they would pay, so it would be pointless. All it would do is bring the partners' profits down at all the top firms, which they definitely aren't going for.

Most firms stay within the same range for all years of associate pay, so not much. The difference in pay is really when you make partner (and bonuses to a much lesser extent).

It's also worth noting that there are places that pay over market rate. Despite what the OP says, according to ATL, Wachtell pays 165k and gives out pretty large bonuses, resulting in around 240k in the end. Also, ATL mentioned a Dallas firm that pays 1st year associates 185k. I'd be a bit apprehensive about long-term prospects there given that it's only about 50 lawyers, but 185k/yr while living in Texas is a pretty sweet deal.

untar614 wrote:It's also worth noting that there are places that pay over market rate. Despite what the OP says, according to ATL, Wachtell pays 165k and gives out pretty large bonuses, resulting in around 240k in the end. Also, ATL mentioned a Dallas firm that pays 1st year associates 185k. I'd be a bit apprehensive about long-term prospects there given that it's only about 50 lawyers, but 185k/yr while living in Texas is a pretty sweet deal.

Bickel & brewer
They've got offices in all major markets

guano wrote:

untar614 wrote:It's also worth noting that there are places that pay over market rate. Despite what the OP says, according to ATL, Wachtell pays 165k and gives out pretty large bonuses, resulting in around 240k in the end. Also, ATL mentioned a Dallas firm that pays 1st year associates 185k. I'd be a bit apprehensive about long-term prospects there given that it's only about 50 lawyers, but 185k/yr while living in Texas is a pretty sweet deal.

Bickel & brewer
They've got offices in all major markets

Sounds sweet. I can't find them in nalpdirectory though.

The short answer is: No incentive to raise salaries, lots of disincentive for any one firm to lower them and send terrible signals to prospective employees and to their clients and peers. We're stuck at an equilibrium until one firm decides to make a big splash by raising them again and trying to cash in on the reputation bounce in the short term until everyone else matches. (Don't hold your breath.)

Quick note: Bickel and Brewer might be the most miserable place you can work. They do ruthless, all-or-nothing litigation, which tends to attract nothing but cutthroat pricks. Average associate works 75-80 hours per week and the first question asked during interviews is how an applicant feels about working full Monday-Saturday and half-day on Sunday. They keep a driver full-time because associates are frequently too tired to be able to drive home, and they have showers at their office because people spend the night somewhat frequently, which should give you an idea of the workload they expect.

So yeah, making $185k in a low-COA city and no state income tax comes with major, major strings attached. There's no such thing as a free lunch.

OP here. Thanks for all the responses- one more question. What is considered "big law"? Any firm that offers that 160k starting salary? Or does it have to do with the amount of attorneys working at the firm?

jetsfan1 wrote:OP here. Thanks for all the responses- one more question. What is considered "big law"? Any firm that offers that 160k starting salary? Or does it have to do with the amount of attorneys working at the firm?

Potato / po-tah-to

jetsfan1 wrote:OP here. Thanks for all the responses- one more question. What is considered "big law"? Any firm that offers that 160k starting salary? Or does it have to do with the amount of attorneys working at the firm?

There's no clear consensus, but it's not just limited to firms that pay $160,000. I would say that whether a firm uses the summer-associate hiring model is probably the biggest factor in determining whether a relatively large firm is a "big law" firm.

Bronte wrote:

jetsfan1 wrote:OP here. Thanks for all the responses- one more question. What is considered "big law"? Any firm that offers that 160k starting salary? Or does it have to do with the amount of attorneys working at the firm?

There's no clear consensus, but it's not just limited to firms that pay $160,000. I would say that whether a firm uses the summer-associate hiring model is probably the biggest factor in determining whether a relatively large firm is a "big law" firm.

I've seen a NYC firm with a summer program that has a sub $100k starting salary; not sure that merits inclusion in "biglaw"

guano wrote:

Bronte wrote:

jetsfan1 wrote:OP here. Thanks for all the responses- one more question. What is considered "big law"? Any firm that offers that 160k starting salary? Or does it have to do with the amount of attorneys working at the firm?

There's no clear consensus, but it's not just limited to firms that pay $160,000. I would say that whether a firm uses the summer-associate hiring model is probably the biggest factor in determining whether a relatively large firm is a "big law" firm.

I've seen a NYC firm with a summer program that has a sub $100k starting salary; not sure that merits inclusion in "biglaw"

That's why I was careful not to say it was the categorical determinant, in the hopes of heading off a post like this.

Bronte wrote:

jetsfan1 wrote:OP here. Thanks for all the responses- one more question. What is considered "big law"? Any firm that offers that 160k starting salary? Or does it have to do with the amount of attorneys working at the firm?

There's no clear consensus, but it's not just limited to firms that pay $160,000. I would say that whether a firm uses the summer-associate hiring model is probably the biggest factor in determining whether a relatively large firm is a "big law" firm.

For law student purposes that's definitely true.

Other factors include:
1) size
2) "market pay"
3) ostensibly full service
4) predominantly business clients

You should enroll in Harvard's Executive Education, Leadership in Law Firms program. In the meantime, it may be a little silly for us to proffer theories on a question this economically dense.

collusion between competitors.

dood wrote:collusion between competitors.

Game theory

rad lulz wrote:

Bronte wrote:

jetsfan1 wrote:OP here. Thanks for all the responses- one more question. What is considered "big law"? Any firm that offers that 160k starting salary? Or does it have to do with the amount of attorneys working at the firm?

There's no clear consensus, but it's not just limited to firms that pay $160,000. I would say that whether a firm uses the summer-associate hiring model is probably the biggest factor in determining whether a relatively large firm is a "big law" firm.

For law student purposes that's definitely true.

Other factors include:
1) size
2) "market pay"
3) ostensibly full service
4) predominantly business clients

Agree 100%. These five factors get at what people mean when they say "big law."

the stars just aren't aligned this time of month dude.

Anyone know why biglaw associate salaries aren't actually lower? lol.

I was thinking that given supply-demand being so skewed these days (and so many lawyers desparate for any kind of work), why wouldn't a biglaw firm take advantage and pay them lower rates? I'm sure a person with $200K debt would be just as happy/desparate for a job at $125,000 as he/she would at $160,000.