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Will 2007 be a good year for young lawyers and paralegals? Most indications suggest it will be, whether legal professionals choose to go for the gold or trade a chunk of change for better work/life balance.
Lawyers’ Salaries Are Moving Up Again
The nation’s largest, most prestigious law firms tend to set starting associates’ salaries nearly in tandem. In January 2007, talk of a substantial hike in junior associates’ pay was echoing in conference rooms in New York, Washington, Chicago and Los Angeles.
“People get their reviews in December, and the unhappy ones start calling around,” says Ed Shioyazono, senior director of direct-hire staffing at Hudson Legal. “There will be a lot of associates moving to firms that pay better.”
“Our starting salary for associates beginning September 2007 is $135,000,” says Racquel Keller, professional development and recruitment manager at Sterne, Kessler, Goldstein & Fox PLLC in Washington, DC. “But we’re not in a lockstep program. It’s driven by what the market and clients will bear.”
Salaries are higher in the New York area, but so are expenses. “Our starting salary is $160,000,” says Scott Berson, a partner and chair of the recruitment committee at Chadbourne & Parke LLC in New York.
A number of other New York firms joined the January move to a $160,000 starting salary, according to a report in the New York Law Journal. “The first-year salary at Simpson Thacher has just gone to $160,000 from $145,000,” says Shioyazono.
In lesser cities, the numbers are slightly less impressive. “Now new grads at big firms in Boston start at about $135,000,” says Randi Friedman, director of career services at Northeastern University’s School of Law in Boston. “But there’s a huge disparity between public and private sectors. Public defenders and district attorneys start at around $35,000 in Massachusetts.”
Even the most junior associate can potentially earn extra. “The bonus pool for associates is determined by a number of factors, like meeting billable-hours requirements,” says Berson. “There are different levels of bonuses. For people who go above and beyond the call, or get into business development, recruiting or writing articles, there may be a super-bonus.”
Lateral Moves May Mean Lower Pay
More lawyers are deciding relatively early on that partnership is not their primary goal.
“The law-firm life is becoming less and less desirable for a lot of people after just two or three or four years,” says Shioyazono. Many lawyers who are still quite young decide that if they want a life outside the firm, they must leave it.
“I’ve helped people go from earning $150,000 a year in a firm to $85,000 or $90,000 doing compliance in-house,” says Shioyazono. “Lawyers making a lateral move typically go from a larger firm to a smaller one, where salaries are generally lower but all over the place, because the hours requirements vary.”
Another common lateral move for attorneys is from a private firm to a corporate legal department. “At a large, publicly traded company with an in-house department, a lawyer with four to five years of experience would typically go in at $160,000, a pay cut from a big firm,” says Shioyazono.
Paralegals Earn a Broad Range
Paralegal pay varies widely, from a working-class paycheck to an impressive salary that enables an affluent lifestyle.
“Entry-level paralegal salaries ranged from $22,000 to $30,000” in 2005, the latest year for which the Orange County Paralegal Association has data, says Rafia Aleem, a paralegal manager and a member of the University of California Irvine Extension’s paralegal advisory committee. “Paralegals with three to five years’ experience earn from $40,000 to $60,000.”
Still, paralegals as a whole haven’t made a lot of progress beyond inflation. “They’re not really benefiting from increased demand” for their services, says Shioyazono.
But the cream of the crop of paralegals -- the most-qualified individuals working at top firms in the biggest cities -- can earn more than a basic middle-class salary. “For the best senior paralegal -- not even a manager -- we saw the salary hit $100,000 in late 2006,” says Shioyazono.
Curiously, you wouldn’t know times are good for legal professionals by asking them. In an October 2007 Hudson Employment Index survey, 46.8 percent of respondents described their own personal finances as fair to poor. Only 38.3 percent said their financial status was improving.
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