Virginia Lawyers Weekly

The skyrocket has landed. With a thud.

Last year, Virginia Lawyers Weekly reported that salaries for new associates at Virginia law firms had “skyrocketed” with some firms upping their starting annual pay by as much as $35,000.

It’s a different story for associates starting out in 2008. VLW’s annual new associate salary survey shows most firms have decided to hold steady on figures from the prior year.

Only a handful of firms decided to increase their starting pay for associates in 2008, and many of those increases merely brought a firm’s pay into line with other big firms in a respective market. Word from recruiters and placement officials is that fewer jobs were offered, as well.

For example, mega-firm Reed Smith boosted starting pay for new associates by $25,000 at its Leesburg office, bringing the annual pay to $150,000, generally in keeping with other big firms in Northern Virginia. But the firm hired only two new associates for the Leesburg location. Since the time of those hirings, things may have tightened up even more at the international firm. Last week, ReedSmith announced it is cutting 115 support staff positions in the United States and dropping 11 associates in London.

As Virginia law school career services officials told Virginia Lawyers Weekly, law firms still are recruiting, but they are making it clear that they do not expect to be extending as many offers as in recent years.

The findings of VLW’s annual “New Associates’ Salary Survey” are intended to be a barometer of legal hiring at major firms in the state. Most of the figures were reported by NALP, the National Association of Law Placement, although we included numbers from a handful of firm interviews. 

The biggest frustration for all involved may be uncertainty about prospects for the coming year. The crystal ball is growing cloudy for business planners at law firms.

Noting that law firms endured a “wild ride” in performance during the third quarter of 2008, an industry tracking service reported rapidly shrinking hourly demand in July and August, followed by a rebound in September. The West Peer Monitor Index, which measures legal market conditions, last month declared, “There appears greater uncertainty in forward planning than seen in recent years.”

Virginia’s geographic differences are reflected in the usual vast variations in lawyer pay. Most Northern Virginia firms are paying between $145,000 and $160,000 for new hires. Newly minted lawyers at the two largest firms in Roanoke, by contrast, are bringing in $76,000 and $80,000. Lawyer pay in the Richmond and Hampton Roads areas generally runs between $110,000 and $145,000.

According to NALP, $160,000 was the median and prevailing first-year associate salary at large firms around the country. Figures from NALP show, however, that the median for Virginia firms outside of Northern Virginia is $81,000.

Associates embarking on a big-firm law career can expect more pressure to perform. The recent report from Peer Monitor notes concern about the “swelling of unproductive associates,” especially in large firms. The large firm segment is experiencing the lowest productivity in the industry, the report said.

Accordingly, some firms are looking at compensation schemes that pin salary increases to performance, as opposed to lockstep raises for all associates. The associates who rack up the most billable hours will be the ones who quickly move past that initial salary level.

View the full results of the survey.

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