February 27, 2006
Associate Salary in Mid-sized Law Firms
A few days ago I posted an example of an overly worded rate increase letter mailed to clients of a mid-sized law firm. Following that post, I received an e-mail from one of my associates. She had asked two different law firms if they were affected by the recent wave of associate compensation increases in mega firms. One said, "Yes, we have already increased pay.” The other said, "What increases are you talking about?"
These events illustrate the mixed response of mid-sized law firms to mega firm actions and, particularly, to the issue of associate salaries. Even if there is little immediate connection for most mid-sized law firms with their distant mega firm cousins, sooner or later their actions trickle down. Certainly not dollar for dollar, but they clearly set a directional trend.
Given the continuing rise in Associate compensation ($75,000 to $145,000 depending on firm size and location), it is now more important than ever to set targets and measure performance in order to ensure that the firm’s investment will generate a profitable return.
Tax laws discourage accumulation of capital in law firms. All the talk of balanced life aside, law firms have to fund operations from current performance. Associates have to pay their way. That means setting targets for revenue production and holding new additions accountable.
Speaking of targets, if you haven't yet participated in the Law Firm Business Survey for the 2005 year, be sure to do so. By doing so, you will receive a copy of survey results. Those results include the performance benchmarks against which you can compare your own firm's results. When you know what others are doing, you know where you can make changes to increase per-partner income in your own firm.
Morepartnerincome.com is sponsored by Juris, Inc. For information about Juris® products and services for increasing law firm performance and partner income, go to www.Juris.com.
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Filed under Compensation, HR by Tom Collins