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First-year associate salaries rise in spite of pandemic pay cuts

Salaries for first-year associates are rising in spite of last year’s pay reductions.

The National Association for Law Placement (NALP) has released its 2021 Associate Salary Survey report, showing that the overall median first-year associate base salary as of Jan. 1, 2021 was $165,000, up $10,000 (6.5%) from 2019, the year of the last survey administration. Law firms of more than 250 lawyers accounted for about 78% of the 572 responses.

“Despite widespread media reports of austerity measures implemented by law firms during the pandemic, including delays in partner draws and in some cases temporary salary reductions for lawyers, the findings from NALP’s latest Associate Salary Survey show that associate compensation has continued to grow over the last two years, with first-year associate compensation of $190,000 now measured as the most common starting salary, reflecting the continued strength of the legal sector despite a difficult year,” said James G. Leipold, NALP’s Executive Director.

Salary increases were not universal across firm sizes. The greatest salary growth was observed in firms of 101-250 lawyers, where median first-year base salaries increased $15,000 from $115,000 in 2019 to $130,000 in 2021 (13.0% increase). First-year salaries in firms of 251-500 lawyers and more than 700 lawyers each grew by $10,000 as compared to 2019, rising to $170,000 and $190,000, respectively. Salaries in firms of 501-700 lawyers were down slightly, dropping from $160,000 in 2019 to $155,000 in 2021. This decrease is not indicative of firms of 501-700 lawyers lowering their first-year salaries since 2019, but it is because of differences in the composition of firms that fell into this firm size between the two years.

Key findings:

  • Although several firms announced $190,000 first-year salaries back in 2018, the overall median salary was still shy of that amount by $25,000 in 2021. However, the median first-year salary in firms of more than 700 lawyers did reach $190,000 for the first time in 2021, accounting for 53.3% of all first-year salaries in this firm size.
  • Across all firm sizes, a $190,000 salary was the modal, or most frequently occurring, first-year associate base salary reported, accounting for 39.6% of all salaries.
  • Despite the fact that nearly 63% of offices reported implementing salary reductions for associates in 2020 due to the impact of the COVID-19 pandemic, all of these offices indicated that salary reductions were no longer in place as of January 1, 2021, thus, ultimately having little to no impact on 2021 salaries.
  • Geography continues to have a considerable impact on salary differences across regions, cities, and states. This year’s report contains analyses for 23 individual cities as well as additional states and regions not encompassed by those cities. These analyses reveal a wide spectrum of law firm compensation, with median first-year salaries by city ranging from $115,000 to $190,000. Outside some of the largest markets, $190,000 salaries were still not the norm. Regionally, the highest median first-year associate base salaries were in the Northeast ($175,000), followed by the South and West, both at $170,000. The lowest salaries were in the Midwest ($130,000).

The full 2021 Associate Salary Survey report is available at www.nalp.org/bookstore.

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