The following is an excerpt from a column by Ed Poll on the affect of skyrocketing associate salaries that will appear in Monday's Minnesota Lawyer.
The news has been the talk of the legal world: average first-year associate pay at the mega-firms has exploded to more than $160,000.
Some commentators say this opens up tremendous opportunity for smaller firms with a more “rational” pay structure.
General counsel at company after company declare that they will not pay for such outrageous salaries when it comes to their legal work.
Of course, with the average lawyer in small firm or solo practice making $60,000 a year or less, this seems a tempest in a far-removed teapot.
But the debate over big-firm associate pay is important because of what it says about our profession and our society.
There’s no doubt that high associate pay is here to stay for the mega-firms. With the competition for top law school talent so fierce, and with profits per partner at the 100 largest firms averaging more than $1 million annually, it’s a given that the cost of legal talent is bound to rise. ...
Associate salaries may be high, but if compared to equity partners’ revenue, the percentage is actually lower today than it was only a few years ago. If associates are making so much money, partners are too.
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