Reasons Behind the Increasing Associate Salaries

04/03/06

Reasons behind the increasing associate salaries

The last seven months saw large salary increases at most major law firms across the U.S. Experts claim the reason behind this salary activity is that the demand for talented young lawyers continually outnumbers its supply.

In the last two decades, law firms have been growing at an increasing rate. The biggest firms have gotten even bigger, owing to growing international, mergers and acquisition, corporate, intellectual property and litigation practices. Moreover, the firms have gotten a whole lot richer. In 2005, nearly 185 firms reported more than $100 million in gross revenues, while at least seven firms brought in more than $1 billion. The result has been greater hiring power for these firms, as demonstrated by the significant increase in the average incoming class size at the largest law firms in the past 10 years. Latham & Watkins, for instance, reported a 162.5% in the incoming class of new associates over the past 10 years.

With the partner track now taking almost 10 years at the average major law firm and the growing amount of law school loans to pay off, young attorneys are more interested in making as much money as possible while they are young than in long-term goals. To that end, salary has become the deciding factor for new grads. This possibly means that as long as firms keep getting bigger and richer, salary hikes will remain the order of the day.

Wilson Sonsini to move to DC
Wilson Sonsini Goodrich & Rosati , the Silicon Valley-based corporate technology powerhouse, is planning to relocate its Reston, VA, office to Washington, DC.

The 28-lawyer office will move 30 miles from Virginia to Washington in order to advance its national platform and strategic objectives. Considering it a natural transition, the firm attributes the change to its clients who are increasingly demanding a DC presence. Also, the firm considers Washington as the home to its antitrust practice, as it is located near the major regulatory authorities, such as the Securities and Exchange Commission and the International Trade Commission.

The office comprises six partners and 22 associates. Five of those partners and 15 associates belonging to the antitrust practice.

Jackson Lewis' "on the job" survey
Jackson Lewis, a national law firm, released the 2005 findings from its annual "on the job" survey. In 2005, nearly 150 corporate attorneys and human resource managers from large and medium-sized companies participated in the law conferences around the country.

Sexual harassment prevention training for supervisors has reached almost 90%, an increase from 2004. 51% of firms reported more gender discrimination claims in 2005. The number of firms sued by an employee, however, showed an 8% decline.

Despite the low national unemployment rate, for the fifth year in a row, job security was the main concern cited by 48% of respondents. This is a substantial drop from 2004, when 66% identified job security as the most critical national issue.

Lawyer Joke of the day
Here is a good old-fashioned dumb, mean-spirited lawyer joke, just the way they ought to be.

A local United Way office realized that the organization had never received a donation from the town's most successful lawyer. The person in charge of contributions called him to persuade him to contribute.

"Our research shows that out of a yearly income of at least $700,000, you give not a penny to charity. Wouldn't you like to give back to the community in some way?"

The lawyer mulled this over for a moment and replied, "First, did your research also show that my mother is dying after a long illness and has medical bills that are several times her annual income?"

Embarrassed, the United Way rep mumbled, "Um… no."

The lawyer interrupts, "Or that my brother, a disabled veteran, is blind and confined to a wheelchair?"

The stricken United Way rep began to stammer out an apology, but was interrupted again.

"Or that my sister's husband died in a traffic accident," the lawyer's voice rising in indignation, "leaving her penniless with three children?!"

The humiliated United Way rep, completely beaten, said simply, "I had no idea..."

On a roll, the lawyer cut him off once again, "So if I don't give any money to them, why should I give any to you?"