Associate Salary Hike to $180K Cited as Strain to Law Firm Profits
In the months since Cravath Swaine & Moore hiked starting salaries for first year associates by 11 percent to $180,000, law firms across the country raised their associate compensation scale to match — and now those pay increases are showing up as profit growth slows at some law firms, according to a new report on the first three quarters of 2016 compiled by Citi Private Bank.
“This is the first quarter we have an opportunity to see that,” David Altuna, a senior vice president and client adviser in the Citi Law Firm group, told Bloomberg Law.
“Altuna said that the associate salary hikes, which started in July and continued to spread during the summer, are causing expenses to grow faster across the industry,” writes Gabe Friedman. “While the most elite firms have been able to grow revenues faster than expenses, all other firms felt the strain of high lawyer compensation expenses.”
Friedman provides a transcript of his interview with Altuna.
