Summary: Cravath has set a new standard for Big Law associate salaries.
Cravath, Swaine, and Moore set a new bar with associate salary pay yet again. On Monday, the Big Law firm matched the first-year pay scale set by Milbank, Tweed, Hadley & McCloy, but they added $5,000 to $10,000 more for midlevel and senior associates, according to Law.com.
In 2016, Cravath raised Big Law salaries by $20,000, from $160,000 in starting pay to $180,000. Last week, Milbank announced that it was giving first-year associates $190,000, and the industry has been on watch ever since.
Before Cravath’s news, Proskauer Rose, Simpson Thacher; Winston & Strawn; and Selendy & Gay matched the Milbank scale; and other firms are expected to do the same.
Cravath’s new associate base salaries will go into effect on July 1st. Not only does the firm plan to raise associate salaries, but it will also increase the amount of mid-year bonuses. Last week, that increase was set by Simpson Thacher & Bartlett.
The Cravath salary scale:
- Class of 2017 — $190,000
- Class of 2016 — $200,000
- Class of 2015 — $220,000
- Class of 2014 — $255,000
- Class of 2013 — $280,000
- Class of 2012 — $305,000
- Class of 2011 — $325,000
- Class of 2010 — $340,000
Cravath Mid-Year Bonus Scale
- Class of 2017 — $5,000
- Class of 2016 — $7,500
- Class of 2015 — $10,000
- Class of 2014 — $15,000
- Class of 2013 — $20,000
- Class of 2012 — $25,000
- Class of 2011 — $25,000
- Class of 2010 — $25,000
Last week when Milbank’s salary increase was announced, Milbank chairman Scott Edelman told Law.com that his firm was paying more to show its associates that they were valued. While attorneys working within Big Law firms may be excited about the bump in pay, some in-house counsel told Law.com they felt the decision was “tone deaf.”
“I find it unfathomable that not just one but many law firms believe that a first-year associate coming out of law school would command such a high starting salary,” an anonymous legal operations director told Law.com. “The tone deafness is astounding. We as purchaser of legal services keep asking our firms to bill based on value because that is what we want to buy, not hours. They respond by raising rates across the board. It is no wonder that the largest-growing segment in the legal industry over the past few years has been the role of in-house counsel.”
Other law firms are expected to match the new scale set by Milbank and Cravath. Before Cravath raised the first-year salary amount to $180,000 in 2016, Simpson Thacher & Bartlett LLP had set the standard in 2007, raising the amount from $145,000 to $160,000.