Legal Industry News
July 13, 2012
Median Private Practice Starting Salaries for the Class of 2011 Plunge as Private Practice Jobs Continue to Erode, Says NALP
The median starting salary for new law school graduates from the Class of 2011 fell 5% from that for 2010 and has fallen nearly 17% just since 2009. The mean salary fell 6.5% compared with 2010, and since 2009 the mean has plunged almost 16% according to new research released yesterday from the National Association for Law Placement or NALP.
The research also reveals that the median starting private practice salary fell over 18% from 2010 and since 2009 has fallen an astonishing 35%. These are among the most dramatic findings that were released this week from NALP’s Employment Report and Salary Survey for the Class of 2011.
“This drop in starting salaries, while expected, is surprising in its scope” according to NALP’s Executive Director James Leipold. “Nearly all of the drop can be attributed to the continued erosion of private practice opportunities at the largest law firms.”
As NALP reported in June, the employment profile for this class also marks a continued interruption of employment patterns for new law school graduates that had, prior to 2010, been undisturbed for decades. Just 49.5% of employed graduates obtained jobs in law firms - compared with 50.9% for the Class of 2010 and 55.9% just two classes ago (see “Class of 2011 Law School Grads Face Worst Job Market Yet - Less Than Half Find Jobs in Private Practice” available at www.nalp.org/classof2011).
Moreover, the distribution of those jobs by size of firm continued to shift, with relatively fewer jobs in the largest firms and relatively more jobs in firms of 50 or fewer attorneys. Nearly 60% of the law firm jobs taken by the Class of 2011 were in firms of 50 or fewer attorneys, compared with 53% for the Class of 2010 and 46% for the class of 2009. (These figures do not include graduates starting their own solo practice after graduating.)
The proportion of jobs in firms of more than 250 lawyers decreased from 33% to just over 21% in just two years. This shift was reflected in the salary figures for the Class of 2010, and again in 2011.
The national median salary for the Class of 2011, based on those working full-time for at least a year and reporting a salary, was $60,000, compared with $63,000 for the Class of 2010 (falling nearly 5%), and the national mean was $78,653, compared with $84,111 for the Class of 2010 (falling 6.5%). Because more salaries were in the $40,000-$65,000 range and fewer were at the $145,000 or $160,000 level, for the first time in many years, the median represented a salary actually obtained by many graduates.
Thus, nearly 23% of reported salaries were within $5,000 of the median.
The national median salary at law firms based on reported salaries was $85,000, compared with $104,000 the prior year (falling 18%), again reflecting the shift in the distribution of these jobs, and also salary adjustments on the part of some firms.
Although salaries of $160,000 still prevail at the largest firms, their share has dropped, creating further downward pressure on the median. And though still a tiny minority, salaries of less than $100,000 at large firms are more common than just a year ago, as more graduates are taking staff attorney or similar positions at lower salaries.
The adjusted mean for all full-time jobs reported was $73,984 (in contrast to the unadjusted national mean of $78,653), and the adjusted mean for full-time law firm jobs was $87,241 (in contrast to the unadjusted mean of $97,821). First introduced with the Class of 2009, the adjusted mean compensates for the fact that the distribution of reported full-time salaries is not the same as the distribution of reported full-time jobs, particularly when it comes to law firm jobs.
Whereas salaries for most jobs in large law firms are matters of public record and reported, just half of the salaries for full-time jobs lasting a year or more in small law firms are reported. The calculation of adjusted means is accomplished by giving more statistical “weight” to the mean or average salary in small firms and less “weight” to the mean or average salary in large firms to calculate the overall law firm mean and also the adjusted mean for all full-time jobs. The adjusted mean reflects something closer to what the true mean would be if an actual salary were reported for every graduate represented in the report. (See Distribution of Reported Full-time Salaries at www.nalp.org/salarydistrib.)
The median salary for government jobs has remained unchanged since 2009, at $52,000. In a bit of good news, the median salary at public interest organizations, which includes legal services providers and public defenders, rose to $45,000, after being at just under $43,000 for two years. The median salary for judicial clerkships was $52,000, virtually unchanged from 2010, but up from $50,000 in 2009.
“It is important to understand that the downward shift in starting salaries is not, for the most part, the result of individual legal employers paying new graduates less than they paid them in the past,” according to Leipold. “Although some firms have lowered their starting salaries, and we are starting to see a measurable impact from lower paying non-partnership track lawyer jobs at large law firms, aggregate starting salaries have fallen over the last two years because graduates found fewer jobs with the highest-paying large law firms and many more jobs with lower-paying small law firms.”
Founded in 1971, the National Association for Law Placement, Inc.® (NALP©) is dedicated to continuously improving career counseling and planning, recruitment and retention, and the professional development of law students, lawyers, and its members.
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