Will Salary Wars for Big-Firm Associates Cool in 2008?
Last year, new associates at big New York firms earned 22 percent of their compensation in bonuses, but some suggest the compensation gravy train could be stalling.
The last time big-firm associates earned such a large proportion of their compensation in bonuses was in 2000, the National Law Journal reports. That year, first-year associates at the big New York law firms earned 24.2 percent of their compensation in bonuses.
The next year, Internet stocks tanked, and the Sept. 11 attacks further damaged an already slowing economy. First-year bonuses went from $40,000 to $20,000 and salaries held firm at $125,000, putting bonuses at 13.8 percent of total compensation, the NLJ story says.
In 2007, many first-year associates at the big firms were doing considerably better, earning as much as $45,000 in bonuses and base pay of $160,000. Will the pattern repeat itself?
Quite possibly, according to the article. “All that cheer in 2007 may become a distant memory, as 2008 is looking increasingly leaner,” it says.
Already there is talk of a recession in 2008, and some law firm consultants told the NLJ that some law firms won’t be able to match salaries offered by competitors if they give associates a raise. James Cotterman, a lawyer pay consultant with Altman Weil, said he expects only a handful of law firms to raise pay in 2008.
