Where Are We With Salaries?
A year and a half ago, I wrote a two-part series discussing reasonable salary expectations (part 1, part 2). I thought it was worth updating as there have been a number of you ask me about this, and it has changed somewhat. I should also mention that employers (usually smaller and who hire every few years) ask for this information as well, so you’ll also be up to date on what we’ve shared with them. I will come back and update this information again when we have 2014 data, likely sometime in the fall.\par \par So what hasn’t changed (and won’t for a generation)? The massive gulf that exists between what I’ll broadly call “Big Law,” and everything else. I almost look at Big Law as a separate industry, not just because of the vast salary difference, but also because there are a number of differences in what the actual job entails when compared to other legal positions (but that’s a post for another day).\par You can see the gulf I’m talking about in our favorite NALP Annual Salary Chart from the graduating class of 2013:\par \par \par \par Notice that the Big Law firms are still paying $160,000 (relatively unchanged since the bulk of these firms went to that number in 2007), and that the next two highest points on the curve are at $50,000 and $60,000. Approximately 38% of the entry level salaries in this survey are one of those three figures. This is relatively consistent with where we’ve been.\par \par What I continue to point out when discussing this data is how so few employers pay in the $100,000 to $155,000 range. A common misunderstanding is that if the Big Law employers are paying $160,000, the next level of employers would pay something slightly less like $140,000. As you can see from the data, that simply isn’t the case. \par \par There are a couple of other facts to take a look at. First, the adjusted mean increased 3.5% in 2013 from $75,554 to $78,205. The prior year’s increase was just 2.1%, and we saw a significant 4.3% drop from 2010 to 2011. You can see this encouraging picture in graph form below:\par \par \par \par Second, I don’t believe I’ve provided median salary numbers in a while (if at all), so I wanted you to see those. Mean data can be so skewed since the Big Law employers drag a lot of numbers to the right. The chart below highlights the median 1st year associate salaries based on firm size. (One big caveat to this chart is the response rate from the various groups of employers; relatively few small firms responded as opposed to the large firms, so the accuracy of the data should be considered accordingly).\par \par \par \par When you consider what we’ve just been discussing regarding the Big Law / everyone else salary gulf, this graph might be a bit confusing. It appears that most law firms are paying at or above $100,000. Don’t let the visual images fool you. Two major things are going on here you must consider: 1) the data from this graph is only made up of law firms (i.e. government, business, other industry are not included), which tend to be higher paying, and 2) The number of firms made up of between two and 25 attorneys far exceeds the number of firms made up of more than that. A quick search on Martindale shows 2,334 law firms made up of between two and 25 attorneys, while only 270 firms show up with more. To illustrate that point, Baylor’s 2013 class saw 71 of our 152 employed graduates (47%) obtain positions with a firm made up of between two and 25 attorneys. 30 (or 20%) obtained employment with law firms with 26 or more attorneys. \par \par There is so much to talk about when discussing salaries, and I plan to continue picking out nuggets here and there to share with you throughout the year. I also encourage you to go back and read the Salary Expectations series I mentioned at the top, and the How to Counter post I wrote in January that ties into this. If you have specific questions about salaries you’d like me to address, 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: Attorney I – Municipal Court Prosecutor (Alumni, Wichita Falls) Log in to Symplicity to view this job and apply. \par ]]>\par