Hanover, MD – October 18, 2022 – Despite the fact that 70% of partners surveyed in July 2020 expected their compensation to be negatively impacted by the COVID-19 pandemic, average partner compensation increased by 15% over the past two years, according to the 2022 Partner Compensation Survey released today by Major, Lindsey & Africa, the world’s largest legal search firm. Pay for U.S. law firm partners now averages $1.12 million, the highest amount ever recorded and the highest percentage increase since our 2016 survey. After law firms saw record-breaking years in 2020 and 2021, only 13% of partners reported that their 2021 compensation was affected by the pandemic, and just 5% expect to see any impact in 2022. The 2022 Partner Compensation Survey was fielded in partnership with Law360 and based on responses from 1,815 respondents across the United States.
“After two years of record profits and strong demand across a range of practice areas, the initial concern about a potentially negative impact on compensation resulting from the pandemic has evaporated almost entirely,” said Jeffrey Lowe, the Global Practice Leader of MLA’s Law Firm Practice and the author of the survey. “That’s especially true for practice areas like corporate, in which partners saw their compensation increase by a staggering 26%. However, with signs of an economic slowdown on the horizon, it remains to be seen how long this trend will persist and the degree to which law firms might consider implementing cost-cutting measures.”
At $1.21 million, average compensation for male partners continues to significantly outpace that of female partners, who earned an average of $905,000 in 2021 – a 34% difference. However, over the past two years, women saw their compensation increase at a greater rate (26%) than men (17%), and the pay differential between men and women continues to narrow consistently and substantially (down from 53% in the 2018 Survey and 44% in the 2020 survey). As noted in MLA’s 2018 and 2020 Surveys, regression analysis suggests that around 75% of the variation in compensation is accounted for by originations and, to a much lesser extent, billing rates. Male partners continue to significantly outpace female partners in average originations, with male partners reporting average originations of $3.045 million as compared to $2.022 million for female partners.
“We’re really encouraged to see the gender pay gap narrow among our respondents; however, considering there remains a 34% gap, significant progress clearly still needs to be made. It’s imperative that firms continue to critically evaluate how their compensation systems credit originations and how they are equitably supporting and encouraging business development,” said Karen Andersen, a Partner with MLA’s Partner Practice Group.
Given that the pandemic has dramatically increased remote work opportunities, not surprisingly, over two-thirds of all partners said they value their ability to work remotely, with the more junior partners indicating a greater importance of working from home (80%) compared to more senior partners (57%). Relatedly, the most junior partners were more than twice as likely as the most senior partners to say they would change jobs due to remote work flexibility (16% versus 7%). Across the board, partners seem very satisfied with the remote flexibility they are being offered. In fact, it appears law firms are offering their partners even more flexibility than the partners desire: While partners reported a preference to work from home an average of 2.51 weekdays, they reported that their firms will allow them to work from home for an average of 3.39 days per week.
“It’s encouraging that law firms appear to be providing greater remote work options than lawyers actually want,” Lowe added. “This finding has profound implications for law firms in developing remote work policies that allow them to attract and retain top talent and strike the balance between providing flexibility and leveraging the benefits of in-office collaboration.”
Other notable findings of the survey include:
The full text of Major, Lindsey & Africa’s 2022 Partner Compensation Survey is available here.
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