Thursday, June 16, 2011
ATL's informal survery shows many small firm associates work long hours while pay varies considerably
ATL's Valerie Katz, the columnist behind "size matters," which covers topics related to small firm practice, conducted an informal survey of the salaries earned and hours worked by small firm associates. Many respondents reported working hours consistent with large firm practice but the salaries varied widely from a low of $25k (for an L.A. 4th year - really!) to $250k (for an attorney who is "of counsel" to a D.C. firm).
Here's a summary of the survery results:
Who took the salary survey?
The majority of survey respondents were
• junior associates (years 1-3)
• in firms 20 attorneys or less
• who had been at the firm for less than two years.
How is salary determined?
78.7% of responders work in small firms where compensation is not lock-step. Interestingly, many did not know what factors were considered in determining compensation but assumed that hours billed, client development, skill and the perception that an attorney will leave were considered. There is a firm in New Jersey that, according to an of-counsel who took the survey, considers “sex appeal” in the compensation determination. If I find out the name, I will be sure to tell you all in case some small-firm hotties want to move to Jersey and make bank.
How much do small-firm attorneys make?
Not enough people in a given geographic location responded for a statistically significant analysis. Here, however, are some general conclusions based on the results:
• Attorneys in Pennsylvania reported base salaries between $77,000 and $130,000. The salaries do not necessarily correspond to class year. For example, a first year and a seventh year in Philadelphia earned $100,000.
• The highest reported salaries for small-firm attorneys came from D.C. The majority of responders reported base salaries between $150,000 and $200,000. The highest salary, $250,000, was earned by an of-counsel who billed 1800 hours.
• Not surprisingly, the small-firm attorneys in New York City reported the highest billable hours.
• The majority of junior associates in Chicago earned less than $100,000. There might be a light at the end of the tunnel for Chicago juniors, however. A fifth year reported a salary of $200,000 for billing 1500 hours. Please e-mail me and let me know where you work (and whether there is need for another mid-level).
• Associates in Los Angeles (years 1-5) reported salaries of $125,000 and under. Some were quite a bit under – a first year reported a salary of $40,000 and a fourth year of $25,000 (note: get out!).
• Of the ten San Franciscans who responded to the survey, eight make $100,000 or higher.
. . . . .
How much do small-firm associates work?
• It varies, of course, but about half of those surveyed said that their firms do have a minimum billable requirement.
• Of the associates who have billable requirements, the requirement is between 1800 and 2000 hours.
• Associates reported billing hours between 1000 and 3050 per year. The average hours billed was 1836.
. . . .
If there are any take-aways from this survey, they are as follows:
• We need to improve our survey skills;
• Many small-firm associates work hours similar to Biglaw; and
• Small firms need to be more transparent when it comes to compensation and financial information. After all, aren’t small firms supposed to be like families? Functional families are not supposed to keep secrets.