Nationwide Pay Raise Watch: Who Now Pays A Starting Salary Of $200,000?
This across-the-board, $20,000 pay raise is just another sign of a tightening market for top talent.
We recently alluded to good news about Williams & Connolly, the legendary D.C. litigation firm, and are now in a position to report that news. The firm has raised base salaries for all its associates, effective April 1, and now pays a starting salary to first-year associates of $200,000. Wow!
According to a memo sent around earlier this month by managing partner Kevin Hodges, associates got an across-the-board pay raise of $20,000, effective April 1. (We haven’t seen the memo, and the firm itself declined to comment, but sources described the memo’s contents to us.)
If you add $20K to each class year in the prior W&C pay scale, which was issued back in December 2007, you end up with this:
Year — Salary
1st: $200,000
2nd: $215,000
3rd: $230,000
4th: $250,000
5th: $270,000
6th: $290,000
7th: $310,000
Very, very nice, and well above the Biglaw market, which goes from $160,000 to $265,000 for these seniority levels (according to the Simpson Thacher scale from January 2007). But remember that W&C doesn’t pay year-end bonuses, unlike most Biglaw firms.
In light of 2014’s pleasantly robust Biglaw bonuses, which under the Davis Polk scale ranged from $15,000 to $100,000, one can see why Williams & Connolly needed to act. Here’s a comparison of the old and new Williams & Connolly salary scales with total compensation for a Davis Polk associate:
Year — Old W&C Salary — DPW Salary + Bonus — New W&C Salary
1st: $180,000 — $175,000 — $200,000
2nd: $195,000 — $195,000 — $215,000
3rd: $210,000 — $235,000 — $230,000
4th: $230,000 — $275,000 — $250,000
5th: $250,000 — $310,000 — $270,000
6th: $270,000 — $340,000 — $290,000
7th: $290,000 — $365,000 — $310,000
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The new Williams & Connolly pay scale is significantly better than the old one. But if Davis Polk and its peer firms pay bonuses in 2015 that are similar to the 2014 bonuses, W&C associates will still end up shortchanged compared to their colleagues at other firms, at least at higher seniority levels. Perhaps Williams & Connolly associates are praying for the economy to tank? That would cause a drying up of transactional work, which W&C doesn’t really do (not counting Robert Barnett’s celebrity book deals), but litigation would probably keep going strong.
But if the economy keeps humming along (knock wood), can a large-scale Biglaw pay raise be that far behind? Base salaries haven’t budged since January 2007, even though inflation and law school tuition have risen over the past eight years (and profits per partner have fared well too, although some of that has been due to “de-equitizing” and other tricks). To enjoy the buying power of $160,000 back in 2007, you’d need to earn $181,128.38 today.
Let’s review the news of the past few weeks. We’ve seen a top Philadelphia firm raise salaries (Dechert). We’ve seen a so-called “merit compensation firm” raise salaries (McDermott). And now we’ve seen a litigation leader raise salaries (Williams & Connolly). While these firms don’t have the power to set a new nationwide benchmark, a la Sullivan & Cromwell, Davis Polk, or Simpson Thacher, they do compete with S&C, DPW, and STB for the same talent.
The job market for the typical law school graduate remains tough, sure. But the market for high-powered young lawyers, the type hired by Biglaw firms, is finally showing signs of tightening. A tightening labor market usually leads to wage growth.
Can I hear “NY to 190” — or at least “NY to 180,” the inflation-adjusted equivalent to 2007’s $160K — in the house?
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Earlier: Nationwide Pay Raise Watch: Williams & Connolly to $180K
