Biglaw firms across the Am Law 200 are announcing salary increases for their associates, with different strategies being applied. An interesting example is Lowenstein Sandler, an Am Law 100 firm, which has implemented lockstep Cravath raises for its most junior associates only, leaving a somewhat mysterious compensation model for its midlevel and senior associates.
Lowenstein Sandler, ranking at No. 99 in the most recent Am Law 100 ranking, saw an impressive gross revenue of $451,902,000 in 2022. According to an internal memo circulated within the firm, eligible associates from the classes of 2023 through to 2021 will enjoy wage increases in line with the esteemed Cravath scale:
- Class of 2023: $225,000
- Class of 2022: $230,000
- Class of 2021: $260,000
In contrast, the firm’s midlevel and senior associates will have their salaries determined using a “performance and market-driven” model. This approach seeks to reward “exceptional performance” and encourages each associate to maintain a level of client service and productivity that befits their respective compensation packages. These changes in base compensation will be communicated directly to each associate.
Beyond the base compensation, the firm is reportedly maintaining a bonus scale which prioritizes high achievers. As was the case last year, only those who have billed 1950 or more hours will be eligible for bonuses at market rates. There will be additional bonus rewards for the firm’s highest billers, classified as those billing 2250+ hours.
This innovative approach to salary distribution could mark a significant shift in Biglaw compensation strategies. While it offers lucrative starting salaries to junior associates, the opaque model for senior colleagues could potentially be risky, but it ultimately emphasizes meritocracy and commitment to productivity.