“Biglaw” is the nickname given to the largest law firms in the world. These firms can employ anywhere from hundreds to thousands of lawyers across multiple offices.
While many are structured as partnerships, make no mistake, Biglaw is big business. The largest of these law firms generate billions of dollars of revenues and reward their partners with millions of dollars in compensation.
The employee attorneys at Biglaw are largely made up of associates, and these positions are highly coveted by law school students. Associates at Biglaw are the (very well compensated) workhorses of the firms and are W-2 employees.
Associates in Biglaw are paid in cash, typically in the form of a base salary and a bonus. The base salary is a fixed amount tied to one’s year of graduation from law school.
At many of these Biglaw firms, the salaries are publicly available or easily discoverable. Sites like Above the Law track Biglaw associate salaries like Fox News tracks Donald Trump rallies. Here is a sample salary scale for associates at many of the leading Biglaw firms in the United States:
- Class of 2018 — $190,000
- Class of 2017 — $200,000
- Class of 2016 — $220,000
- Class of 2015 — $255,000
- Class of 2014 — $280,000
- Class of 2013 — $305,000
- Class of 2012 — $325,000
- Class of 2011 — $340,000
Bonuses are in the form of cash and typically paid once a year. The bonuses at many of these firms are closely tracked by Biglaw partners and associates and frequently end up being very similar, if not the same across law firms (leave it to precedent-following lawyers to create a socialist system of equal pay for all).
At some firms, particularly NYC-based firms, the bonus is lockstep, meaning everyone in the same class year receives the same bonus regardless of hours billed.
At other firms, the bonus for a particular class year will fall into a range with the amount based on hours billed and other subjective performance metrics factored in. Failure to bill a minimum number of hours could result in no bonus.
Below is last year’s bonus schedule for associates at Cravath, Swaine & Moore LLP, a Biglaw firm headquartered in NYC, which was followed by many other Biglaw firms:
- Class of 2018 — $15,000 (prorated for the fact that members of the Class of 2018 only graduated from law school in the spring and started work in the summer/fall)
- Class of 2017 — $15,000
- Class of 2016 — $25,000
- Class of 2015 — $50,000
- Class of 2014 — $65,000
- Class of 2013 — $80,000
- Class of 2012 — $90,000
- Class of 2011 — $100,000
- Class of 2010 — $100,000
Many Biglaw firms have multiple offices across the United States. For some of these firms, the salary and bonus is the same for all associates of the same class year, regardless of their office location. For the geographically flexible associate, this is a serious opportunity to save a lot of money by working and living in a state with no or a low state income tax.
For example, let’s say a Biglaw firm has an office in New York City and Houston and offers the same pay by class year in both offices. A Class of 2013 associate, could literally be doing the same type of work billing the same hours as her New York City peers, but by living in Texas instead of New York, she would be saving $38,000 more in one year than if she lived in New York (assuming $275K salary + $80K bonus and 10.73% combined NY state and NYC city income tax).
While salary and bonus get the headlines and make up the vast majority of a Biglaw associate’s annual compensation, Biglaw associates do get some nice perks, including free meals for working late, great tech support from IT (to keep those associates billing) and reimbursement for bar expenses. Biglaw associates typically do not receive a 401(k) match nor any equity in their law firm.
So, Biglaw sounds great – every law student looking to maximize their personal finances should just go work in a Biglaw firm, right? Perhaps, but the problem is that not every law student will be able to land a job in Biglaw.
In fact, most don’t, and it’s a big reason why there’s a bimodal distribution of starting salaries for law school graduates.
On the one hand, you have a lot of first year attorneys in Biglaw earning very hefty compensation packages. On the other hand, you have a much larger cluster of graduating law students with jobs outside of Biglaw, in other law firms, corporations, government and public interest that pay well under six figures.
What you end up with is a minority, but still quite large, group of first year attorneys making two, three or more times in compensation than most other first year attorneys.
What do you think about Biglaw associate compensation? Does it seem outrageous to you? Are the compensation amounts fair?
Interested in learning about how in-house lawyers are compensated? See my post on that topic here.
