Higher pay, but fewer jobs at largest law firms

Salaries for summer associates are rising, but most predict fewer jobs moving forward.

The National Association of Law Placement, or NALP, reported that the median salary for first- and second-year summer associates is $2,600 per week, and $2,700 per week for third-year summer associates, an 11 percent increase over the prior year.

The American Lawyer released its own salary data, showing that summer associates at the nation’s largest law firms is $3,285 per week. This is comparable to what NALP reported for law firms with 250 to 700 attorneys — $3,500 per week.

Four law firms tied for the highest summer associate pay, The American Lawyer reported, with a weekly rate of $3,750. Those firms were Fried, Frank, Harris, Shriver and Jacobson; Dechert; Kramer Levin & Frankel; and Cooley.

The bad news, however, is that law firms are hiring fewer summer associates and associates.

"A majority of firms are telling us that their partners are not busy enough," Eric Seegar, a consultant at Altman Well, told The American Lawyer. "In firms where partners are having a hard time keeping themselves busy, they have less work to throw to associates." 

The number of summer associate positions declined by 2.02 percent, according to The American Lawyer.

Data gathered by NALP confirms that summer offers are on the decline for law firms of all sizes, not just at the big law firms. The NALP 2017 Associate Salary Survey report found that 50 percent of law firms were making fewer summer associate job offers for Summer 2017 than in the previous year.

Starting salaries for new attorneys has also risen, but the median remained flat.  A number of law firms, primarily in New York, Washington, D.C. and Los Angeles, have increased starting salaries to $180,000.

But regional law firms have not increased to match these big firms.

“It’s not what I expected to see,” said James Leipold, NALP’s executive director. “After all of the publicity surrounding the move to $180,000, I fully expected to see the national median starting salary for law firms move upwards, but what the data reveal is that for the most part only the largest firms in the largest legal markets made the move, and while many offices are paying $180,000 to start, many are not. The result is upward movement in some law firm size bands while the national median has remain unchanged.”

Region and geography played important roles in salary variances. The NALP survey analyzed 30 cities and additional states and regions not encompassed by those cities. The overall median salary for first-year associates in firms of more than 251 lawyers was $135,000, but ranged from $90,000 in firms of 50 or fewer to $160,000 in firms of more than 250 lawyers.

As more law firms grow through mergers and acquisitions, the largest law firms are not as similar to one another as they used to be, the report stated. There are firms with more than 700 lawyers that consist of smaller regional offices, many of which do not pay starting salaries of $180,000. In turn, many large law firm starting salaries fall below that salary level.

As more big law firms adopt the $180,000 starting salary, the median first-year associate salary will likely increase as well. Law firms made a similar move in 2007 to increase starting salaries to $160,000, but it took several years to become the standard starting salary in most large law firms, the NALP report stated.