This article was originally featured in our All Rise newsletter on April 18, 2022. For more legal content and news, follow the link to subscribe.
A competition has emerged among law firms, battling for who will offer the highest salary increase. But in the latest round, some firms are struggling to keep up.
It was within the last few weeks that the law firms of Millbank LLP, Davis Polk & Wardwell and Cravath Swaine & Moore countered each other’s salary increases with their own. By the end, senior associates were seeing their salaries surge by 13%, particularly at one notable firm.
Cravath Swaine & Moore is currently in the lead and keeping the competition tough. Davis, Polk & Wardwell offered $396,500 weeks earlier but still fell short of Cravath’s $415,000 for senior associates.
The salary war started when these elite law firms began competing for top law talent, particularly the increasing competition to hire midlevel associates, according to experts. It also helps that record-breaking revenue and profits in 2021 have allowed law firm executives to offer these over-the-top raises.
Davis Polk & Wardwell initiated the race in 2021 by increasing the salary for starting associates to $202,500. That increase caused other firms, such as Cleary Gottlieb Steen & Hamilton, Proskauer Rose LLP and Gunderson Dettmer Stough Villeneuve Franklin & Hachigan LLP, to follow suit with their own salary increases.
Ira Coleman, the chair at McDermot Will & Emery LLP, told the media, “We are so happy to be in a position to be able to reward our hardworking, best-in-class associates in this way. We see your amazing level of commitment and know you are ‘all in’ and very aligned with our plans to be the number one career accelerant in the legal profession.”
Not all firms, however, will be able to compete. Shannan Rahman, a managing partner with the Atlanta-based legal recruitment firm Partners Group, said, “non-elite firms are kind of putting their hands up, like ‘we don’t want to play this game.’ Particularly at firms that aren’t the Cravaths and that have that level of profit. I think you’re going to get more and more pushback from partners.”
Non-elite firms are going to have to look for other ways to not only attract top attorneys to their firms but keep them around. Attorneys are well-aware of the significant pay increases that may await them at these elite firms, but it’s important to note that many non-elite firms still maintain healthy business models and a wealth of legal talent.
