Market News

As Associate Pay Scale Gets Set Across US, Market Will Feel Ripple Effects

By Andrew Maloney for

Several large law firms are making sweeping changes to their multitier structure of associate compensation, either by standardizing pay for all U.S. associates across cities or giving pay bumps for associates in smaller cities. 

The overall effect will likely lead to multiple ripples in the legal industry. As firms increase or standardize salaries for associates in smaller markets, even more young attorneys could look to relocate, especially as more firms look to hire remotely. Meanwhile, midsize or small firms in those secondary markets could also face more talent competition by name brands in Big Law.

Already, at least seven Am Law 200 firms have increased salaries for associates in smaller cities to match their peers in major markets, or have raised associate salaries across the board. Those include DLA Piper; Taft Stettinius & Hollister; Troutman Pepper Hamilton Sanders; McGuireWoods; King & Spalding; Alston & Bird; and Ice Miller.

The moves are driven by big gains in revenue or profits in the last year, ever-increasing competition for top talent, pressure by special bonuses throughout the legal industry and an increased tolerance for remote and satellite work after the disruption caused by the pandemic.

Standardizing associate pay should give firms more flexibility to staff matters and provide a boost in hiring and retention, said legal industry observers, and it could also send a positive signal to clients that the firm is bringing its best resources to bear, whether they’re in New York, Los Angeles, Atlanta, Cleveland or elsewhere.

But it could have more consequences further down the line. For one, it could further decrease the importance of geography and open up more relocation by associates,said Michelle Fivel, a recruiter at Major, Lindsey & Africa who focuses on associates in top markets. 

Giving associates the option to go to a different market and still make the same amount of money should help firms ultimately hang on to their talent, Fivel said. But she said plenty of attorneys are still waiting to see exactly how their firms handle a return to in-person work to decide whether they want to relocate. If a firm isn’t flexible enough in its remote working policy, an associate might choose to make a jump.

“There are a lot of people who’ve gone all different places [during the pandemic]. They’ve gone home to their parents. They’ve gone to live in less-populated places. They’ve gone to the beach, because, why not?” Fivel said.

“We’ve seen obviously some associates make lateral moves because they want to change geography, but I think the bulk of that is yet to come, and it depends on the policies firms implement after the pandemic has settled down,” she added.

DLA Piper in March announced it would match the market rate across all offices, with a scale starting at $190,000 for first-year associates and $340,000 for those in their eighth year. McGuireWoods and King & Spalding did the same, moving to a single compensation scale for U.S. associates, according to memos published on Above the Law.

DLA Piper and McGuireWoods confirmed those moves to The American Lawyer but otherwise declined to comment. A representative for King & Spalding could not be reached for comment on the move. 

Meanwhile, Alston & Bird announced it would move to a single pay scale, from $190,000 to $325,000, for all U.S. associates starting June 1, while Troutman Pepper announced salary adjustments across markets, broken into four different tiers where starting salaries range from $125,000 in cities such as Harrisburg, Pennsylvania, and Rochester, New York, to $190,000 in cities such as Atlanta and Charlotte, North Carolina, now, according to memos published on Above the Law.

Ice Miller implemented raises of at least $20,000 or more, boosting starting salaries across several markets.

Ice Miller confirmed the moves in an email to The American Lawyer last week but otherwise declined to comment. Representatives for Alston and Troutman could not be reached for comment.

At Taft, after the 2020 merger between the Cincinnati-based firm and Minneapolis-based Briggs and Morgan, the firm last month announced across-the-board market adjustments to pay, effective July 1, 2021. In particular, starting salaries for first-year associates will increase from $175,000 to $190,000 in Chicago; from $125,000 to $135,000 in Cincinnati; Columbus, Ohio; Dayton, Ohio; and Indianapolis: from $135,000 to $145,000 in Cleveland: and from $140,000 to $150,000 in Minneapolis.

“Part of our ‘Play to Win’ strategy is to hire great talent, both on campus and laterally. To do that, we need to do everything well, including providing highly competitive compensation and benefits packages in each of our markets,” Taft’s chairman and managing partner Robert J. Hicks said in a statement. 

The firm’s chief recruiting officer, Lisa Watson, added that “the market has become hypercompetitive for top talent and this decision is based on understanding current trends and taking a long-term view.” Top talent was critical in client service and achieving quality, diversity and financial goals, she added.

New Talent Opportunities

As Big Law firms continue to invest in growth after big gains last year, increasing base salaries in smaller markets opens new doors for them to seek the best talent. George Wolf Jr., a law firm consultant for Aon, said widespread remote work caused by COVID-19 means “everyone is now in play in terms of building your associate ranks.”

He said the pandemic expedited the situation, but that increasingly global clients and firms were pushing the market that direction anyway. And although it does give those firms and lawyers added flexibility, it’s also a defensive move to protect rising stars. 

Wolf added that messaging to clients has to be clear to be a net positive for firms—that increasing associate pay is about recruiting and keeping top talent and doing everything in the clients’ best interest with the most talented lawyers—and not the insinuation that firms are earning a lot of money and overpaying.

And although Big Law can benefit from the talent acquisition race, others may not.

“Another challenge is going to be for regional firms and local firms to fend off these larger firms who are coming into these locations and trying to work virtually,” Wolf said. “Local corporations will now have the alternative of using an Iowa law firm, for example, or a national law firm with greater reach.”