New York Times DealBook: Salaries For Law Grads Jump Higher, by Elizabeth Olson:
Big law firms are enjoying staggering upticks in profitability after years of consolidation and double-digit billing rate increases. That has led to eye-popping compensation for top partners despite concerns that artificial intelligence tools could disrupt the industry. Now the elite firms are again ratcheting up the pay scale for entry-level lawyers in a competitive market …
Raising the bar: Milbank moved first to raise associate salaries earlier this month when it said it would increase the base salary for first-year lawyers by $10,000 to $235,000 annually. It will now pay lawyers in their eighth year — usually when associates make partner or leave — a base of $455,000. Sullivan & Cromwell has reportedly decided to match Milbank’s salary scale, according to Above the Law, with first-year associates at $235,000.
The compensation growth is a top-down phenomenon. The consolidation trend means firms have been divvying profits between fewer owner-partners. And leading firms have had a bigger financial pot to shell out for rainmakers, the lawyers who attract big-name business.
That’s led “king-of-the-hill firms to pay top partners like major league sports figures, with salaries crossing the $30 million and $40 million threshold for a handful,” Kent Zimmermann, a legal industry consultant at Zeughauser Group, told DealBook. …
To shore up their foundations, big firms are aggressively recruiting law students as early as their first year in law school, according to a survey of 3,000 law students by the National Association for Law Placement, a legal professional service, and the Law School Admission Council.
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