In a recent survey on the effects of associate salary increases conducted by Altman Weil Inc., companies are feeling the ripple effects. In addition to restrictions on the extent to which junior associates can work on files, these increases are having an impact on corporate law department recruiting and hiring.
Attracting and landing qualified candidates is getting harder. In the past, non-executive level lawyers usually took a decrease in salary of approximately 20% when moving from a law firm to a corporate legal department. That percentage has jumped to about 30% - 35% now, which has caused some associates to think twice about leaving.
Corporate human resources departments are also feeling the pressure. As outside counsel rates climb, many GCs are bringing more work in-house, as Law.com reports (see, “General Counsel Keep Close Watch on Associate Pay Hikes,” July 12, 2007). And more work in-house means legal hiring managers are leaning on HR to make budget adjustments in order to attract top lawyers. Hiring a new lawyer at a higher base salary than those at comparable experience levels often necessitates across-the-board adjustments. So, the ultimate beneficiaries of associate raises may end up being the lawyers who are already practicing in corporate departments.
