Boom times for young NYC lawyers
KAI RYSSDAL: The Chicago Bar Foundation kicked off a fundraising campaign today. It’s asking well-paid lawyers in the Windy City for as much as $500 to help the less fortunate — defined in this case as legal-aid lawyers who make less than 40,000 a year.
Meanwhile, first-year associates at a top firm in New York City are bringing down $160,000. Not bad for a job right out of law school.
Partners say it’s just to thank their associates for working hard in these boom times. But Ashley Milne-Tyte reports it’s probably not just gratitude.
ASHLEY MILNE-TYTE: John Plauche is a fourth-year associate at a top New York City law firm. He got a $20,000 raise last year. When his firm announced salary hikes across the board in January, he received another 20 grand. At 30 years old, he’s on $210,000 a year.
He says he knows what’s behind his good fortune.
JOHN PLAUCHE: Wall Street and Wall Street bonuses.
He says firms like his do a lot of work for investment banks and hedge funds. Some lawyers end up defecting to work in-house at those companies. And pay at those places has been breaking records recently. That puts pressure on the law firms.
PLAUCHE: So to keep talent, basically, the law firms have to keep raising pay to keep up with Wall Street.
That, he says, has a knock-on effect at elite firms across the country.
Bill Urquhart agrees. He’s a senior partner at Los Angeles law firm Quinn Emanuel Urquhart Oliver and Hedges. After news of the New York raises rampaged across the Internet, his firm announced it would match the hikes.
BILL URQUHART: For law firms like ours, you really don’t have a choice but to pay what the market is demanding you pay. Otherwise, you start either a quick or a long-term decline.
He says he and his rivals are in a fierce battle for the best law-school students in the country. Once they’ve tapped those superior legal brains, they want to keep them.
Urquhart says attrition is not a big problem at his firm, where the road to partner is short. But an unprecedented 37 percent of associates do leave their firms within three years — before firms have had a chance to recoup their investment. Some move on within the legal profession; others quit law altogether.
John Plauche says during his first year as a lawyer, half his contemporaries left before the year was up. Some because of the demands of the office.
SFX: Vibrating Blackberry
He says the call of the Blackberry is one thing. Cancelled vacations and non-existent weekends are another.
PLAUCHE: I’d spent the last President’s Day weekend holiday, you know, on a nine-hour conference call one day and doing several other projects that, you know, had to be done. They’d pay me a huge salary and so my time to a certain extent is theirs, because that’s what they pay for.
Plauche is fairly sanguine about his lot. Not just because of the money, he says, but because he has a great boss. Someone he says treats him like a human being and doesn’t casually land him with overnight assignments.
Not everyone’s so lucky. Kellie Schmitt is a reporter for California legal paper The Recorder. She’s polled a number of associates, asking whether they’d rather have the big raises or earn less and have more free time.
KELLIE SCHMITT: The answer is often “We’d rather get a little bit less and have a better work-life balance.” And with these raises, some of the associates brought up the concern that they don’t want their billable hour requirements to go up; they don’t want to work more in order to get this increase in their paycheck.
She says what they would like is a little more recognition for their efforts.
Still, at least those fat raises help young lawyers pay off their student loans. James Leipold is executive director for NALP, a trade association of law schools and law firms.
JAMES LEIPOLD: Most law students graduate with more than $70,000 in debt just in law-school loans.
And, he says, despite the big hikes at corporate firms . . .
LEIPOLD: The rise in average law-school debt has also continued to outpace these salary gains.
Things are harder for lawyers in the public sector, whose starting salaries are less than half of those at first-tier corporate firms.
John Plauche has lasted four years, but is he in this for the long haul? He says given that just 8 percent of first-year associates eventually make partner . . .
PLAUCHE: I’ve no delusions about making partner or staying in law forever.
In the meantime, though, he’s happy to invest a chunk of his high earnings and enjoy the good life . . . when he has time.
In New York, I’m Ashley Milne-Tyte for Marketplace.
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