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Partner Pay Grew in Philadelphia but Not Everyone Is Satisfied

Lizzy McLellan LAW.COM

Law firm partners in Philadelphia tend to make less than the average partner industrywide, a new survey shows, and they’re less likely to report high satisfaction with that compensation.

Major, Lindsey & Africa released its biennial Partner Compensation Survey last week, conducted in partnership with legal market research specialist Acritas. While a number of Philadelphia partners remain unsatisfied, the survey reflects an increase in average partner compensation in the city.

Philadelphia respondents reported average compensation of $702,000, which was the fourth-lowest average among 14 total major cities surveyed. Still, that number represents a 12 percent increase from the 2016 survey, which found average partner compensation in Philadelphia to be $625,000. (The sampling of respondents, who are from Am Law 200 firms and similarly sized law firms, was not identical from survey to survey, which may have impacted the findings.)

Philadelphia also had the second-lowest partner billing rate, at $618. The only city where the average rate was lower was Minneapolis, at $550. All major cities reported an increase in billing rates, the survey found.

Major Lindsey found that average compensation among all respondents nationwide, including equity partners and nonequity partners, was $885,000, up 1 percent since the last survey in 2016. But billing rates outpaced compensation growth. The average billing rate among all respondents was $718, showing an increase of 5 percent.

Nationally, median compensation, which is less skewed by cities with the highest partner pay, was $575,000. That’s lower than the average compensation all of the major cities, but close to the average compensation among partners located outside major cities, which was $569,000.

Among the 14 cities analyzed in the survey, Philadelphia had the lowest percentage of partners reporting that they are “very satisfied” with their compensation. Just 12 percent of partner respondents said they are very satisfied with compensation. The highest proportion of very satisfied partners was in Los Angeles, with 31 percent.

In Philadelphia, 64 percent of respondents said they are satisfied to some extent, marking a decrease from 78 percent in 2016. And 30 percent of respondents said they are dissatisfied to some extent.

The only cities with higher dissatisfaction numbers were Houston and Minneapolis. In 2016, 22 percent of Philadelphia respondents said they were dissatisfied to some extent.

It should be noted that in 2018, compared with 2016, the survey provided more options for respondents to choose from in terms of their satisfaction levels. “Neutral” was an option in this year’s survey, which captured 6 percent of Philadelphia respondents. And there were six other options: very satisfied, moderately satisfied, slightly satisfied, slightly dissatisfied, moderately dissatisfied and very dissatisfied.

The survey also asked about originations, noting the strong connection between originations and total partner compensation. Average originations increased among Philadelphia partners from 2016 to 2018, reaching $2.19 million. That fell below the average of $2.57 million, which was boosted by high numbers in New York and Dallas, but Philadelphia landed well above the median for originations, which was $1.25 million.

Of the 1,383 total respondents that answered Major Lindsey’s survey, 52 were from Philadelphia, representing 4 percent of the total sample. Total respondents and Philadelphia respondents were greater in number in 2016, with over 1,600 total and 82 Philadelphia respondents that year.

The full survey took a closer look this year at the gender pay gap, dedicating a focused set of questions to that issue for the first time. And the survey found a gap of 53 percent between male and female partner pay.

While that is a greater number than the survey has found in previous years, study author Jeffrey Lowe, global practice leader of Major Lindsey’s law firm practice, cautioned against concluding that the trend is worsening, noting that the 1,400 to 2,000 partners who have responded in the five previous surveys are not fixed.

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