Thanks to record-breaking profits in top law firms and competition to retain employees who put in long hours at home during the COVID pandemic, junior lawyers can expect to earn more than $200,000 a year at many top law firms, according to a Wall Street Journal article.
Unlike other industries, corporate law firms usually increase pay collectively after a few top firms take the lead.
The leader in this round of salary increases was New York firm Milbank LLP, who recently announced pay raises of between 4.4% and 5.9% for non-partner lawyers. These increases mean that a newly minted lawyer who graduated in 2021 will earn $200,000, up from the $190,000 level set by Milbank three years ago.
Several firms are following Milbank’s lead. New York–based Davis Polk & Wardwell LLP, will be paying newly graduated lawyers $202,500, rising to $365,000 for those who have been with the firm at least eight years. Recent raises were also announced at New York firm Cadwalader, Wickersham & Taft LLP, Boston-based Mintz, Levin, Cohen, Ferris, Glovsky and Popeo PC, and 725-lawyer Proskauer Rose LLP, and many firms have also paid associates bonuses throughout the pandemic.
The sector has fared well over the last year due to a higher volume of transactional work coupled with lower costs during the pandemic – attributed to lawyers working from home, thereby minimizing travel and corporate expenses. These large profit gains usually shared exclusively among partners can now be afforded to less-senior lawyers.
Junior lawyers tend to bill around 2,000 hours per year, which can be significantly more than 40 hours a week when including tasks that are not billed to the client. Working at home alone during the pandemic has led to isolation and a shift in the work–life balance. According to Scott Edelman, chairman of Milbank, “It’s been tough. There’s no division between work and nonwork, and the recharging from social interactions.”
Despite these large firms increasing salaries, only a small minority of law school graduates secure jobs at firms paying the highest salaries. The vast majority start out at smaller firms, where the salaries are lower.
The heads of these high-paying firms say that they are in a fight for the best and brightest graduates, and that even they lost associates during the pandemic. Most firms are actively seeking to attract more lawyers to tackle the increasing amount of work currently being generated.
There are more than 9,000 job postings for lawyers and staff on law firm websites – the highest number of positions ever recorded. According to Laura Leopold, founder of legal intelligence firm Leopold Solutions, “Money alone may not sway many in the market. Work-from-home flexibility and other perks will be needed to win in this atmosphere.”
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