Big Law Salary Ins and Outs
The current state of big law salaries shows that the top 100 firms in the country are currently paying starting salaries ranging from $190,000 to $210,000 for first-year associates. Many of these firms are now outshining those who entered the profession a year or two ahead of them. In 2020, Amlaw 100 firms offered an average of $168,000 to their first-year associates. By 2021, that increased to $183,000 and by 2022, that number was $190,000. It’s likely that first-year associates in the Amlaw 100 will see the trend continue, making as much as $210,000 by 2025.
New York offices, traditionally, offer the highest salaries at big law, with the largest firms in the nation offering the highest salaries . The list of law firms paying $190,000 to first-year associates in their New York offices consists of Davis Polk, Simpson Thacher, Wachtell Lipton, Weil Gotshal and Sullivan Cromwell. Not far behind them are Cleary Gottlieb and Skadden, each of which pay $185,000 to their New York first-years. Others in Chicago (Kirkland, Sidley and Latham), Boston (Latham, WilmerHale, Goodwin and Ropes & Gray), San Francisco (Latham, Simpson Thacher and Kirkland), Los Angeles (Gibson Dunn, Emissioners & & Bartholomew, Morgan Lewis and Sidley) and DC (Davis Polk, Sidley and Gibson Dunn). Many of the AmLaw 100 that are based in cities like Dallas or Houston begin their first years at $165,000. It is likely that this will be an industry-wide trend by 2025.
What Affects Salary Changes
Factors Influencing Salary Changes in Big Law by 2025
Several key variables could impact the landscape for attorney salaries in big law by the close of 2025.
The economy. The health of the overall economy, in particular how it affects demand for legal services, will directly tie to law firm revenues. If revenues lag, struggling firms may be unable to justify significant rate increases. If the economy accelerates, in contrast, demand for legal services should remain strong and upticks in salary for associates become more likely.
Consolidation. The last several years have seen some of the largest law firms going through substantial mergers. The result is that the big law landscape is less fragmented today compared to years past. This could result in increased cost pressures on all firms, making it difficult for firms to increase associate compensation.
Automation. Technological advancements are already having a transformative effect on the work lawyers do, particularly in the administrative space. In turn, this is driving significant efficiency gains, as work previously assigned to junior attorneys now may be performed by paralegal or outsourced providers. Further advances are expected to have a profound effect on the speed with which legal work can be done and perhaps on traditional billing rates.
The impact of boomer retirement. Attorneys age 70 or above currently represent about six percent of partners and seven percent of associates. This age cohort has the greatest potential to impact salaries, as this group would likely take up chairs and receive the largest compensation. Large law firms will need to address this intense competition for top talent in the coming years, perhaps by reshaping their hiring and compensation philosophy.
A Look Into 2025 Salaries
With the recent announcements of significantly increased salaries at six of the country’s largest law firms, we are optimistic that other firms will also be raising their salaries to stay competitive. So far this year, the biggest increase over 2021 pay has been seen from Davis Polk & Wardwell LLP, who announced a $10,000 bump for all associates, for a new raise highwater mark for the industry of $415,000.
So where does that leave us for the next few years? Legal Loop reached out to some of our nation’s leading legal futurists to get their predictions on what BigLaw salaries will look like in 2025.
Marie Bernard – Leading Legal Futurist
"In the past year, one of our clients gave several senior associates an additional bonus component. This was for a job well done and to slow down the annual exit rate. I suspect that the trend for the future will be to find new ways to give money back to senior associates – to keep them past the 5-year point. In 2025, I predict that any increase will be associated with a bonus component based on ‘good standing’ with the firm and how one’s work is perceived by the firm."
Ken Grady – Legal Futurist
"2025 will see a decline in BigLaw jobs. Corporations will continue working to cut costs through ‘alternative legal service providers’ and other avenues. Any increase in BigLaw pay in this environment will be tied to 1) reduced compensation for partners/capital partners; 2) greatly increases inequality where those who remain are paid significantly higher than market; or 3) an unhealthy pursuit of profits which will threaten the firm when the next recession hits."
Laura Petrolino – Chief Community Officer, LAWCLERKS
"We can expect other firms to follow suit with similar salary raises, but this doesn’t mean we should assume all firms will move in the same direction at the same time. The desire to pay top dollar for top talent will trump over and over again in the quest for talent. This means it is likely we will see a salary ‘arms race’ like we are seeing now. This (potentially risky) behavior has a strong precedent in the tech industry where blustery hiring for top talent has been going on for years. What does this mean for the future of law firms? Those that can win the war for talent will win clients and have greater success. And, the less able, financially weak firms will lose out."
Jack Newton – CEO, Clio
"It’s hard to say what the salary will be in 2025 for large law firms. Because the tool of AI is so advanced, that may take away a lot of the low level work, and at the same time, because lawyers tend to be looking for raises, all they’ll do is raise the salaries of all associates across the board. At the large firms, Wealthy people have almost more lawyers than they need and they will be over-lawyering. I think work will be siphoned from that. Then you’ll have some firms caught between a rock and a hard place – they’ll have too many lawyers for the amount of work that is available and won’t know what to do with them. We hope there will be enough innovation in the profession so that most of the grunt work can be siphoned off to AI, that way the lawyers can do more of the interesting, higher-value work. My hunch is that if they do that, the salaries won’t go up – we’ll just see lawyers being smarter and more valuable."
Specialization Affects Salaries
As noted above, we predict that the majority of legal professionals will make more than $200,000 in 2025. Still, it is important to recognize that even elite big law lawyers can end up earning less than their peers in other segments of the profession. If you are pondering a career in big law or weighing an offer, it helps to know which specialties and practice areas are expected to be the most lucrative in 2025. In our view, generalist big law practices that target smaller clients will likely prove to be the lowest paying big law jobs 2025. Similarly, we anticipate that revenue growth will be modest for big law firms focusing on areas with intense competition. Examples include IP and large corporate litigation. By contrast, we expect that specialized areas like health care, privacy, and insurance will see the most demand as law firms rush to stockpile talent and resources in these fields. All three align with well-studied, long-term trends (healthcare spending outpaces GDP growth, explosions of data from various sectors, and increasing insurance needs due to emerging risks in a variety of fields).
Salaries Vary By Region
Big Law salaries vary significantly by geographic region. New York is still king, while Silicon Valley and Houston continue to gain traction. A solid majority of firms, however, remain geographically neutral, with salaries pegged only to class year and seniority. The following chart compares the average salary offered for 2020 entry-level associates in the 5 highest-paying legal markets (in descending order of average total compensation). The figures represented in the chart are the higher of base salary and "all-in" total compensation (which includes discretionary bonuses and other monetary benefits): In addition to New York, Washington D.C., Chicago, Los Angeles and San Francisco all cracked the top 5 of highest-paying legal markets for the 2020-2021 period . Emerging ‘hotspots’ for coveted legal jobs include Houston, Boston, Denver and Seattle. Interestingly, Miami, Austin and Dallas also appear to have gained some traction in this area but are still considered "up-and-coming" markets. So will geography still be an important consideration in future years? Will the higher cost of living in major legal markets like New York, D.C. and San Francisco keep the competition there fierce? Salary rates appear to be increasing in major legal cities along with more affordable legal markets, but geography may also become less critical due to the continued widespread adoption of remote working arrangements. Only time will tell.
Comparing Associates to Partners
Historically, associates have earned a fraction of what partners make. The gap between associate and partner pay used to be a few hundred thousand dollars at some of the largest firms. The disparity has shrunk a great deal in recent years, however. A second year associate at an AMLAW 200 firm might make $190,000 while a partner at that same firm would make $350,000. Still a big difference, but not nearly as big of a gap as there was several years ago.
Technically, it’s not the part that makes the most money, but the part that makes the most money is getting more and more expensive, so associates have to make more money to stay ahead of the curve. This is why you’re starting to see more associate salaries in the neighborhood of $200,000 and above at some of those bigger firms. The salaries are, of course, higher in the major legal markets, where the cost of living is significantly more.
But even compensations for attorneys are expected to increase in the coming years, perhaps more so for associates than partners. There’s no guarantee of course, but there are a lot of factors that would have to come into play for the gap between partners and associates to increase again. In other words, there’s no indication that this trend will reverse. It’s more likely that the gap will continue to narrow over the next few years than it is to see it widen again.
Expect compensation to increase across the board for big law firms especially considering how many others out there just like it that are hiring associates at the same or very similar salaries. It’s a competitive market for firms to acquire top talent, and the best way to do that is with higher compensation.
Will Technology Change Salaries
The legal industry is experiencing enormous change due to technological advancement and artificial intelligence. Some of these advancements are creating opportunities that did not previously exist. For example, generative AI tools will enable lawyers to draft contracts more quickly and efficiently, making them more valuable to clients.
As automation becomes more prevalent in big law, with self-service portals and online platforms streamlining administrative tasks, lawyers can focus more on the substantive issues their clients face. The result could be a new working classification for lawyers, similar to other professional services, which further blurs the lines between the levels of employment and experience. Rather than having a definite separation between junior associates, mid-associates and more experienced lawyers, we could see a more fluid role make-up as lawyers gain experience more rapidly and are freed from the routine tasks that currently consume many hours in a week.
On the client side , the rise of AI-discovered insights could also impact the salaries of those who rely on the basics of the law rules their entire careers. As younger generations of attorneys grow up familiar with AI-assisted technology, they may become much more valuable to clients, reducing the demand for highly expensive, experienced attorneys who may not have kept up with or adapted to the rapid increase in technology and modern ways of working.
The use of these technologies will also impact other stakeholders. For example, there could be a decline in the demand for outside counsel, as companies can access legal services themselves through legal service providers. Should law firms adopt these technology tools more widely, they can reduce time spent on administration and allow attorneys to focus on the core functions of legal work. Should law firms or clients adopt these technology tools more widely, they can reduce time spent on administration and allow attorneys to focus on the core functions of legal work. This could free up money for the salaries of those who are enlisted to do the work that cannot be done by a computer program.
