Law grads may soon earn up to $190,000 in their first full time jobs out of law school.
The Wall Street Journal reports that New York law firm Milbank, Tweed, Hadley & McCloy – a bellwether for starting pay among law firms – has decided to raise first-year associate pay. The firm has announced that during their first eight years of practice, Milbank lawyers will receive raises of between 4.8% and 6.4% annually. With these increases in pay, top lawyers at the firm could ultimately be making $330,000 a year.
First-Year Salaries Over The Years
Associate salaries haven’t seen many changes in recent years. According to the National Association for Law Placement, the overall median first-year salary as of January 1, 2017 was $135,000, which was the same as in 2015.
First-year associates endured the downside of the 2008 recession the worst, as many were let go from their firms. Equity partners who showed declining productivity were given the pink slip, with many partners seeing their compensation decrease, according to Law.com. Since the recession, salaries have been slow to catch up.
“Cost-cutting continued even after the worst was over,” according to Law.com. “Relentless pressure on partners and associates to earn their big paychecks by increasing billable hours continues, especially with ongoing client demands on firms to reduce costs. Once cut, the chances of getting back on track into another partnership or partner-track position haven’t been good.”
Milbank Sets The Bar
At Milbank, the salary increase sets a new standard for law firm salaries. Yet, there’s a slight catch. According to Law.com, Milkbank and a number of other firms who have increased salaries also have trimmed pension plans and retirement compensation packages over the years “in an effort to gain more control over firm finances.”
In 2016, Law.com reported that Milbank’s partners, who originally were eligible to receive 25% of the average of their highest compensated years for life, became only eligible to receive 18%.
Jeffrey Lowe of the legal recruiting and consulting firm Major, Lindsey & Africa in Washington, D.C., tells Law.com that newly-minted lawyers should be weary of purely focusing on salary, and rather, keep long-term goals in mind.
“It is not uncommon for young people to focus only on the starting salary rather than what their opportunity for advancement might be in the long run,” Lowe tells Law.com. “But ask yourself, “is this the firm or the practice you are interested in?”
Sources: Wall Street Journal, Law.com, National Association for Law Placement