This post on the Greedy Boston Board of Greedy Associates highlights the dilemma that the New York salary wars has created beyond the Big Apple. To the junior associate or law student, it is difficult to justify accepting an offer from one top firm if another top firm is paying a higher salary (or paying a higher salary in their New York office.)
But the economics of New York practice are not the same in other markets. Larger deals enable firms to operate with greater associate leverage (i.e. more associates per partner) and billing rates in New York tend to be higher as well. Most businesses recognize that they need to pay more for talent in New York than elsewhere in the country so why should the practice of law be any different?
Several of the New York firms have purportedly raised salaries in their Boston offices (e.g. Weil, Proskauer and Skadden will pay their new Boston associates $160K.) I imagine that fear and a robust demand for legal talent will ensure that within a few months, firms like Wilmer, Ropes and Goodwin will do something as well for their Boston hires.
But what if you have accepted an offer from a firm that decides not to budge? What if you work for one of those firms and know that one of the higher paying firms is hiring in your practice area?
As I said a few posts ago, I strongly believe that it is important to stay focused on the big picture when analyzing this situation. Intangibles are far more important in the long run and if you are in an environment where you are thriving, think twice before chasing the money.
I do think that firms who choose not to raise will need to articulate a good rationale for paying “below market”. But a number of firms successfully did this during the last boom by demonstrating what the firm has to offer beyond a very large paycheck. In addition, some of the firms that chose to follow the market are no longer in business. So just remember that maximizing your income today, may not serve you well in the long run.