By David Thomas for Reuters
Large U.S. law firms may be poised for yet another round of associate pay raises, with New York-based firm Milbank on Thursday increasing annual salaries by as much as $20,000 depending on seniority.
Within hours, rival New York firm Cadwalader, Wickersham & Taft said it would match the new Milbank salaries.
Both firms said first-year associates will see their base pay rise from $205,000 to $215,000, while eighth-year associates will see their pay jump from $365,000 to $385,000.
Milbank chairman Scott Edelman said the firm is coming off a record year of revenue and profits, though he declined to give specifics. The firm and its employees are also experiencing the same rise in inflation as the rest of the country, he said.
“A dollar doesn’t go as far as it did last year,” Edelman said. U.S. consumer prices increased in December, contributing to the largest annual inflation growth in nearly four decades.
Cadwalader managing partner Pat Quinn in a statement said the firm is committed to paying its lawyers “at the top of market.”
Lawyer pay at the largest U.S. law firms has ballooned over the past year, thanks to both salary increases and bonuses. Many firms have struggled to keep up with client demand for M&A work and other services, leading to a war for talent.
“We’re always focused on recruiting,” Edelman said in an interview. “Compensation is one piece of that package and puzzle.”
Seven months ago, a series of major U.S. law firms said they were increasing associate pay, with first-years seeing their base pay rise past $200,000. That wave of pay increases was also kicked off by Milbank, with Cadwalader following in quick succession, and a similar cascade of raises now appears likely.
Edelman said he would not be surprised if Milbank’s move triggers other firms to follow suit.
The Milbank and Cadwalader pay increases are retroactive to Jan. 1. Milbank said they will apply to the firm’s associates in the United States, London, Asia and Sao Paulo. Cadwalader said they apply to attorneys in good standing.