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Mean Salaries Only Tell You So Much
If you read this blog regularly or remember anything from programs I’ve led or spoken in over the years, you’ll be familiar with the infamous entry-level salary graph. \par
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It shows the percentage of entry-level attorneys earning various salaries. Usually the point I’m making when showing the graph is the large valley between the $160,000 peak (paid almost exclusively by large law firms) and the $60,000 peak (paid by everyone else), where it is very rare to find an entry-level salary between $85,000 and $155,000.\par
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Today, however, the focus is on the peaks and the mean. I’ve heard from students quite a bit lately regarding offers, what is fair, what is unfair, how the offer compares to the mean and how to go about making a counter offer. Typically this arises when a firm offers a salary that is below the mean, and the candidate feels it is either unfair of offensive.\par
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It is important to keep in mind that a mean is just an average, and if you look closely at the graph, it is an average of a wide variety of data points. The salary curve begins its upward trajectory at $20,000, meaning there is a least some reporting of entry-level attorney jobs paying that amount. It goes all the way to $160,000. You’ll notice that very few new attorneys are earning the mean of $82,000, somewhere around 3%. \par
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What do we learn from this? First, it is a mistake to think you’re going to earn the mean salary; hardly anyone does. Even the adjusted mean of $78,000, which takes into account the relative underreporting of lower salary positions, is only earned by around 4% of new graduates. So while knowing the mean may be helpful in negotiating with your future employer, you should be aware that far more employers are paying $50,000 and $60,000 than they are anything other than $160,000.\par
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We also have to keep in mind that a mean is not a floor. The very nature of a mean is that there are numbers on each side which create it. To take offense at any salary offer to the left of the mean would treat a mean like a salary floor, which it is not. A very large chunk of employers pay salaries below the mean, are doing it fairly, and are paying as much as they can afford and still stay in business. They realize that if you are a superstar, they are going to have to increase your pay over time or lose you to another employer. \par
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I think that if you’re not in the running for a big law / $160,000 position, you almost have to eliminate that side of the graph when gauging what a reasonable salary offer is. Consider what the mean would be without the $160,000 salaries going to 17% of new attorneys. I haven’t seen numbers on this, but it would likely be much closer to the left-hand peaks of $50,000 and $60,000. \par
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There are two important caveats to this issue: 1) some of you may well be able to find a position which pays in the valley (Intellectual Property attorney comes to mind), so don’t allow what I’m saying cause you to devalue yourself if you fit into a handful of unique categories, and 2) evaluate the employer based upon the its size, type and location. A mid-size firm in Dallas with large corporate clients will often be one of the above-the-mean employers. While a five-person Waxahachie personal injury firm will likely be of the below-the-mean variety. Note that you are the same person, candidate, etc. regardless of the employer, and yet you are going to get offered different amounts based upon the employer. That’s normal, okay and should be expected. \par
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I hope this helps provide some perspective as you approach job offers now and in the future. I’ll address related issues in the near future, and if you have specific questions about this please let me know.\par
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Connect with Daniel at Daniel_Hare@Baylor.edu and/or @BaylorLawDaniel on Twitter.\par
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Job of the Week: Each week I highlight a job in Symplicity you might be interested in but may have missed. This week's job is: Briefing Attorney or Junior Staff Attorney (Thirteenth District Court of Appeals, Edinburg) Log in to Symplicity to view this job and apply.
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It shows the percentage of entry-level attorneys earning various salaries. Usually the point I’m making when showing the graph is the large valley between the $160,000 peak (paid almost exclusively by large law firms) and the $60,000 peak (paid by everyone else), where it is very rare to find an entry-level salary between $85,000 and $155,000.\par
\par
Today, however, the focus is on the peaks and the mean. I’ve heard from students quite a bit lately regarding offers, what is fair, what is unfair, how the offer compares to the mean and how to go about making a counter offer. Typically this arises when a firm offers a salary that is below the mean, and the candidate feels it is either unfair of offensive.\par
\par
It is important to keep in mind that a mean is just an average, and if you look closely at the graph, it is an average of a wide variety of data points. The salary curve begins its upward trajectory at $20,000, meaning there is a least some reporting of entry-level attorney jobs paying that amount. It goes all the way to $160,000. You’ll notice that very few new attorneys are earning the mean of $82,000, somewhere around 3%. \par
\par
What do we learn from this? First, it is a mistake to think you’re going to earn the mean salary; hardly anyone does. Even the adjusted mean of $78,000, which takes into account the relative underreporting of lower salary positions, is only earned by around 4% of new graduates. So while knowing the mean may be helpful in negotiating with your future employer, you should be aware that far more employers are paying $50,000 and $60,000 than they are anything other than $160,000.\par
\par
We also have to keep in mind that a mean is not a floor. The very nature of a mean is that there are numbers on each side which create it. To take offense at any salary offer to the left of the mean would treat a mean like a salary floor, which it is not. A very large chunk of employers pay salaries below the mean, are doing it fairly, and are paying as much as they can afford and still stay in business. They realize that if you are a superstar, they are going to have to increase your pay over time or lose you to another employer. \par
\par
I think that if you’re not in the running for a big law / $160,000 position, you almost have to eliminate that side of the graph when gauging what a reasonable salary offer is. Consider what the mean would be without the $160,000 salaries going to 17% of new attorneys. I haven’t seen numbers on this, but it would likely be much closer to the left-hand peaks of $50,000 and $60,000. \par
\par
There are two important caveats to this issue: 1) some of you may well be able to find a position which pays in the valley (Intellectual Property attorney comes to mind), so don’t allow what I’m saying cause you to devalue yourself if you fit into a handful of unique categories, and 2) evaluate the employer based upon the its size, type and location. A mid-size firm in Dallas with large corporate clients will often be one of the above-the-mean employers. While a five-person Waxahachie personal injury firm will likely be of the below-the-mean variety. Note that you are the same person, candidate, etc. regardless of the employer, and yet you are going to get offered different amounts based upon the employer. That’s normal, okay and should be expected. \par
\par
I hope this helps provide some perspective as you approach job offers now and in the future. I’ll address related issues in the near future, and if you have specific questions about this please let me know.\par
\par
Connect with Daniel at Daniel_Hare@Baylor.edu and/or @BaylorLawDaniel on Twitter.\par
\par
Job of the Week: Each week I highlight a job in Symplicity you might be interested in but may have missed. This week's job is: Briefing Attorney or Junior Staff Attorney (Thirteenth District Court of Appeals, Edinburg) Log in to Symplicity to view this job and apply.
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