Law firm associate salaries increase
One large law firm after another is falling prey to the new, higher level of associate salaries, $160,000! My, oh my! Where will this madness stop?
Larry Bodine has an interesting take on this phenomenon, saying that the marketing opportunities for the smaller, regional firm are now greater than ever.
Bruce MacEwen has a different perspective, suggesting that we’re asking the wrong question and looking at the wrong issue when we focus on the first year’s associates’ salary increase.
And, with some reflection, I agree with Bruce. He suggests that the salary may be high, but high compared to what? If compared to equity partners’ revenue, the percentage is actually lower today, with the higher salaries for associates, than it was only a few years ago. That may mean that associates have too little clout to keep up … or that partners’ greed has surpassed all reason.
Comparing the difference, however, to industry, one can see that we (the legal profession) once again merely reflect what is happening in our clients’ businesses and, indeed, in our society. After all, when has anyone been paid more than $200 million to leave a CEO position? Especially when the company profits and stock value have gone down on his "watch!" And the ratio of difference between workers and management is at an all-time high.
Clients should not be surprised at law firm rate increases resulting from the lawyers’ cost increases after they take a moment to review their own company policies about executive compensation. I said "should." That doesn’t mean they won’t. And that doesn’t mean they won’t take some action, such as beginning to do some of their legal work internally before sending it to outside counsel. (See an earlier post of mine on this subject.)
Also, review my article on how and when to raise fees. This is a topic of current concern given the salary increases and the time of year.
Change will occur, but only after our clients get focused on our contributions to the delivery of their value to their customers … When that will occur and what form that will take remains to be seen.Tags: Cash Flow - Finances
Categorized in: Cash Flow - Finances