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Forget unlimited vacation days, free car services, firm-sponsored memberships at the local Equinox. If you want your associates to stay around longer, you'll want to give them a raise.
That's the lesson from BigLaw, at least. Many of the nation's top law firms bumped first-year associate salaries up $20K last year, from $160K to $180K. That's kept young lawyers from leaving firms for comfier, but not as lucrative, in-house gigs, according to Law360. But there is a downside to that retention. The extra cash has to come from somewhere, and here it's coming out of partners' pockets.
Gotta Pay to Make 'Em Stay
The switch to $180K for first-year, BigLaw associates began last year, with Cravath leading the way. Since these firms tend to run in herds, and since competition for the best law grads can be fierce, almost all of the largest firms quickly followed suit, abandoning the standard $160K that had reigned since the beginning of the Great Recession.
The extra money is helping reduce attrition, too. The pay hikes have made associates "less likely to jump ship for in-house jobs, buttressing law firm retention," according to Law360's Aebra Coe.
The higher pay has also lead to increased responsibilities, but few associates seem to be chafing at the extra work. The majority of associates facing increased work demands feel that the change is justified given their salary increases, according to a recent survey by Above the Law and Major, Lindsey & Africa.
But I'm Not BigLaw
Of course, not everyone is able pay associates $180K a year, plus bonuses. Even BigLaw is feeling the pinch, Law360 reports, with lower partner compensation and potentially fewer partnerships in the future.
For those outside of the biggest firms, $180,000 is two to three times the typical starting pay. First year associates outside of BigLaw can expect between $56,500, the low end at a small firm, and $116,500, the high end of midsize firm salaries, according to Robert Half Legal's 2017 Salary Guide.
That doesn't mean there's no room for movement, though. An increase from $70K to $80K, for example, can still encourage associate productivity and firm loyalty. You can also try offering non-lockstep raises and bonuses. An "eat what you bill" system can allow your top performers to earn proportionately larger remuneration. And it's popular. According to the Above the Law survey, a majority of attorneys would prefer alternative compensation systems, 54.21 percent to 45.79 percent. Two-thirds would even be willing to accept lower pay, if it meant less demanding hours.
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