Law Firm Salaries: If You Can't Beat Them, Retreat From Them
When New York firm Simpson Thacher announced its decision to raise starting associate salaries to $160,000, most law firms raced to jump on the bandwagon. But as this article (9/25/07) reports, one midsize New York law firm, Duval & Stachenfeld, has taken an opposite strategy: It pays starting associates $60,000 -- or $100,000 below the going rate. Salaries don't stay flat, however, and by their third year, D&S associates can expect to match salaries of their counterparts at top firms.
There are several reasons behind D&S's approach. From the article:
The idea is that [the firm] will attract first-years from second-tier schools or less-competitive students at the top schools. Within two years, about half of those junior associates will prove themselves and hop on the gravy train of the top scale. Meanwhile, the hefty pay for mid-level and senior associates makes Duval & Stachenfeld an attractive option for unsatisfied laterals from top firms.
In addition, lower pay enables the firm to hire more associates and to mitigate clients' concerns that they're subsidizing the cost of training high-paid associates.
Given the realities of the the current legal market that my colleague Bob Ambrogi posted on yesterday, there are probably no shortage of applicants for positions at D&S, even with the lower pay scale. Moreover, it's a win-win situation for the firm, which gets the benefits of cheap labor by lawyers who are grateful for an opportunity to have a job at all.
Question for readers: Why aren't more firms taking this approach?
Posted by Carolyn Elefant on September 25, 2007 at 05:10 PM | Permalink
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