Salary bump keeps more BigLaw associates from going in-house, but will partners feel a pinch?
The big bump in BigLaw associate salaries last year has slowed the movement of young lawyers to in-house jobs, but it might have a lead lining—the money has to come out of partners’ pockets and the number of partnerships could decline, Law360 (sub. req.) reports.
Cravath Swaine & Moore set the new curve last summer with an offer of $180,000 for first-year associates, which a number of other large firms soon matched. The amount was an increase from $160,000, which had been the measure for nearly a decade, the New York Times reported last summer.
The sudden hike prompted a demonstrable increase in associate retention for the big firms, according to Michelle Fivel, of the search firm Major Lindsey & Africa.
“From the candidate perspective, when I approach them with in-house opportunities, they now have increased standards for what they’re willing to throw their hat into the ring for, mostly based around compensation,” Fivel told Law360.
Several consultants told Law360 that they were concerned with the ramifications of the big pay raises, which typically included more senior associates. With hundreds of associates, a firm has to move millions of dollars from elsewhere to pay them.
That could mean fewer partnerships and thus a harder try at the big prize for those young lawyers who got bigger salaries, and maybe pay cuts for non-equity partners.
