By Gavin Rubin, Law Practice Management Section Executive Committee. Rubin is a principal with Attorney Network Services, which provides full service legal staffing to both law firm and in-house legal departments. He can be reached at (213) 430-0440. The opinions expressed are his own.
The saying "The more things change, the more they stay the same" fits nicely with large firm attorney compensation.
Since experiencing monumental and historical increases a few years ago, large firm associate salaries have held steady. The typical salary structure for area large firms (based on years) can be summarized as follows:
Year one, $125,000; year two, $135,000; year three, $150,000; year four, $165,000; year five, $185,000; year six, $195,000; year seven, $205,000; and year eight, $210,000.
Large international firms based out of New York with local offices top local associate salaries by offering a $135,000, $145,000, $160,000, $175,000, $195,000, $205,000, $215,000, and $220,000 salary structure.
Yes, these salaries are healthy, but there is no free ride. Associates working at such firms can expect minimum billable hour requirements of 2,000 hours or greater. Likewise, hour-based bonuses are facing higher benchmark targets while discretionary bonus amounts are on the decline. Partnership tracks are becoming longer, and some large firms are shying away from a pure lockstep system. Ironically, the law firm blamed for starting this salary escalation, Gunderson Dettmer, lowered salary levels in its lockstep system. Some out there are no doubt saying, "I told you so."
The Daily Journal Extra, February 23, 2004, listed the top 21 firms in California by profits per equity partner. The general trend shows that profits per equity partner for many of the state's largest firms are considerably up despite an overall sluggish economy. Gibson Dunn tops the list at $1,373,000, up 16 percent from a year ago, followed by O'Melveny & Myers at $1,281,000 (+16 percent), Latham & Watkins at $1,274,000 (+12 percent), Irell & Manella at $1, 171,000 (+32 percent), and Paul Hastings at $1,060,000 (+13 percent). Hats off to these firms and others on the list for posting significant gains in a challenging economy.
No matter how you slice it, the compensation of attorneys is a dicey subject. Only a small number of practicing attorneys are invited into the ranks of the large law firm salaries that people read about, and those recipients pay a price through long hours and high demands that frequently lead to burnout. The majority of practicing attorneys probably face maxing out at compensation levels of about $150,000, which means salaries at early career stages probably started out in the $65,000-$70,000 range.
The practice of law is now more than ever a business and less a profession. The bottom line -- Compensation levels are usually proportional to how hard an individual works so make sure you enjoy it.
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