Milbank Tweed Hadley & McCloy LLP’s announcement on Monday that it would increase associates’ salaries signals the beginning of another race to match a new, higher pay scale, but not all firms may follow, leading to further stratification between the most profitable firms and everyone else.
Firms that are financially stronger are likely to follow Milbank’s lead in offering associates a base salary bump of between $10,000 and $15,000, in much the same way that BigLaw lined up to match the scale set in 2016 by Cravath Swaine & Moore LLP. But some experts say lagging firms are likely to take a more considered appraisal of the markets they work in and the associates they are targeting before following suit.
“I think after the experience of the late '90s and early aughts, firms are going to be much more circumspect about joining the pay raise bandwagon,” according to Jeff Lowe, global practice leader of Major Lindsey & Africa’s law firm practice group. “Firms have discovered over the past 20 years that they get perfectly great associates and they don't have to play the same economic game as firms much more profitable than themselves.”
“Perhaps this is where we’re going to see additional stratification,” said Michelle Fivel, a partner at Major Lindsey & Africa specializing in associate and partner recruiting. “The truth is if you’re not paying market and not super-competitive at the top of the market, your brand does lose a little bit of stock among the candidate pool.”
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