I remember, and not so very many years ago, when the associates’ committee I served on had to convince our firm to bring first year salaries up to $100,000 to be in parity with the market. Our firm wasn’t a market leader, but we definitely tried to keep up. Of course, by the time you read this post, two or three other firms will have already followed Simpson Thatcher’s lead in bringing first year salaries up to $160,000, and perhaps beyond it.
I am not a number-cruncher so I don’t have any gee-whiz statistics to wow you with. Nor do I think $160K is going to bring the legal community to its knees. Neither is it really that remarkable. Simpson’s move is just one more step in the direction of an important trend.
Of course law firms need to keep attracting strong talent, of course rates are continuing their march toward the infinite. Frankly, the big boys can afford $160K, and more. But there is a catch. No, it is not just “more hours.” Associates and partners alike are already putting in “more hours.” What this really signifies is that the “class” distinctions between lawyers are widening, and there will be no reversal of that trend.
Higher salaries are an easy call for an economist. Market conflation means that fewer firms are market leaders on an increasingly shrinking planet. When attorneys from Atlanta can represent Norwegian interests in Costa Rican factories for products distributed in Africa, under Singapore law, you know that you are working in a global market. This means that fewer firms competing for a large, and increasingly sophisticated pie of high-quality work.
Well. This means that competition for the best talent will only continue to spiral. But more importantly, there will be less and less room for error. Associates at premier firms are already walking across a tight rope. That won’t change–although the wire is getting higher and higher. The real, rubber-hits-the-road change, is that the safety net for those who falter is getting smaller, and farther away. Why? The largest firms are not only international powerhouses, of course, but they are grabbing up the premier domestic work. The market of “safety-net” firms has, and will continue to shrink. Bottom line: blink and you will be out of the promised land, your salary will shrink by a third, perhaps more, and the doors to ground-breaking work will be increasingly closed to you. You’ll be on the outside, looking in, and the glass is getting thicker.
Enjoy the money. No pressure.