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Salaries on the rise -- do you need more evidence than this?
It seemed armchair analysts just a few months back were questioning whether law firm salaries would make a real shift upward, but judging by the tidal wave of raises seen, I think we can put that question to rest now. Here's a look at what we've seen lately in stories at Law.com (registration may be required) and the U.K.-based Legal Week.
Law.com:
More Law Firms Boost Pay for Associates
A Key Factor for Associate Raises: Location, Location, Location
Sullivan & Cromwell Boosts Associates' Pay
Hogan & Hartson and Dickstein Shapiro Raise First-Year Associate Pay
Drinker Biddle to Add More Salary Partners
Keker Matches Associate Salary Hikes
More Law Firms Match Regional Salary Hikes
DLA Piper Raises First-Year Pay to $125K
Large Miami Firms Boost Associate Pay by Nearly 10 Percent
Latham Boosts Associate Salaries
Wilson Sonsini Follows the Trend and Raises Salaries
L.A. Firms Lift Associate Salaries
Gibson Dunn Bumps Up First-Year Pay to $135,000
Finnegan Raises Salaries for Junior, Midlevel Associates
Cravath Reveals Bonus Figures, While Kenyon Raises Associate Salaries
Legal Week:
Wall Street giant breaks pay stand-off with salary hikes
Simpson Thacher matches $20k pay hikes
Starting salaries predicted to rise as US pay round looms
Freshfields salary hike trumps A&O
Partners slam A&O salary hikes amid fears of renewed pay war
Freshfields to hike City pay rates
Skadden sets new pay benchmark as regions brought in line with NY
Weil Gotshal increases associate pay by 3%
CC raises junior lawyer pay
White & Case ups UK NQ salary stakes
Resident expert on the economics of law firms, Bruce MacEwen has some insights into what's behind all the activity:
Raises overdue
"It's basically 'pent-up demand' insofar as there hadn't been a raise since 2001--but costs for things like rent in major cities, law school tuition, etc., have definitely gone up big-time.
No U.K. link
"It did *not* start in the U.K., I do not believe; their absolute pay scales are lower than the U.S.'s to begin with.
Bonus connection
"The only connection I see to bonuses is that so many firms were loading all their 'extra' comp. into bonuses that it was beginning to look a little top-heavy, and it probably made sense to put some back into salary when, for all intents and purposes, the minimum bonus amount had become a fixed expense--might as well recognize it for what it is and get credit!
The Joneses
"... it's really a phenomenon of 'leave no firm behind.' What I mean by that is that all of the AmLaw 50/100 feel that to maintain their prestige they need to pay 'the going rate.' So once the dam breaks, firms have no real alternative but to follow suit. Not to do so would not only jeopardize recruiting, but could even start rumors about a firm's solvency or health."
So if your firm isn't keeping up with the Joneses, stick this list in your pocket and think about it.
Meanwhile, the forecast for 2006 continues to look bright:
2006 Salary Forecast: Larger Paychecks
Posted by ScottMartin on February 10, 2006 at 04:06 PM | Permalink
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