Following Milbank’s decision to raise associate salaries, top-tier firms that traditionally position themselves at the apex of the market are expected to follow suit. However, there is a prevailing sense of caution in the industry, with less eagerness this year for comprehensive market matching, according to legal recruiters and industry observers. Only 24 hours after Milbank announced a $10,000 pay raise for each associate class in 2024, with the most junior class earning $225,000, there was no similar action from other firms.
Certain firms are seemingly waiting for other market leaders, like Cravath Swaine & Moore and Davis Polk & Wardwell, before adjusting their market salaries and bonuses. Despite the lack of immediate response, there is still the expectation that at least a few firms will match Milbank’s move and possibly even raise the bonus scale. Nonetheless, the legal industry is still coping with increasing expenses, political disruption and technological challenges.
Despite these reservations, there is an anticipation that Milbank will not stand alone. Legal analysts suggest that the history of the industry implies yet another firm will match, creating a domino effect across the market. That being said, not all firms have the resources to instantly follow large-scale salary boosts. This year, law firms have seen only a modest average revenue growth of 4.0% while demand fell by 0.9%, prompting a circumspective approach to compensation increase.
Furthermore, industry insiders observe that such salary increases could further segregate the industry. Notably, as law firms focus more on profitability, which contradicts the augmentation of associate compensation, one of the firm’s most significant costs. This might force law firms to choose carefully, underlining the viability of such adjustments. Nonetheless, a handful of firms, thanks to strong litigation or key practices in high demand, will likely make their move after successful planning and judicious consideration.
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