Midsize U.S. law firms roll out raises, perks to recruit attorneys in talent war

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REUTERS/Yuriko Nakao
  • Firms offer salary hikes, sabbaticals, law school loan repayment
  • U.S. midsize law firm job openings reaching new highs in busy market

Dec 28 - Midsize U.S. law firms are facing recruiting pressure in a tight labor market, compelling some to raise early career attorneys' salaries and offer other perks.

These firms, which typically have 25 to 200 lawyers and often operate regionally, are extending benefits such as paid sabbaticals and law school loan repayment. Several have raised starting salaries, at times matching or even surpassing those at larger firms.

Michelman & Robinson co-founder and chairman Sanford Michelman said in October the Los Angeles-based firm of around 75 lawyers will offer its most junior associates, typically fresh out of law school, $230,000 a year in salary starting in 2022. Michelman declined to provide previous salary figures.

Many of the largest U.S. law firms said last summer in memos from their leaders that they would pay salaries starting at $205,000 for first-year associates and reaching $365,000 for the most senior associates, as raises swept that segment of the industry.

The need to hire and keep associates, including at midsize firms, accelerated in the second half of 2020 and has continued as M&A and capital markets transactions surged. Litigation associates were also in higher demand this year as courts sought to reopen.

Leopard Solutions, which tracks law firm hiring, said there were 525 job openings posted at midsize firms in the third quarter of this year, compared to 288 in the same period in 2020. Leopard analyzed data from its proprietary database at Reuters' request.

Phil Flora, Leopard's sales and marketing vice president, said the midsize market is set to eclipse 2,000 open jobs for 2021, a number that the company has "never seen in any of the years that we've been tracking this."

Some midsize firms have given associates raises that are below the largest firms' pay but still substantial.

Vanessa Crocetto, chief marketing officer for Michigan-based Butzel Long, said the firm of about 150 lawyers will pay its most junior associates salaries of $125,000 in 2022, up from $110,000.

Wheeler Trigg O’Donnell, a Denver-based firm with about 100 lawyers, boosted salaries in October from $160,000 to $180,000 for its most junior associates, and from $227,000 to $256,000 for its most senior, said recruiting chair Andrew Unthank.

Pouring money into associate pay isn't always an option for midsize firms, which typically charge clients less per hour than large law firms and tend to have smaller budgets.

"The whole talent struggle is bigger in midsize firms, simply because they can't compete on the money side,” said Tom Clay, recently retired managing principal of law firm consultancy Altman Weil.

Some midsize firms said they do not see themselves as direct competitors with the biggest firms and do not need to match salaries in order to attract the lawyers they want to hire.

Kristina Lawson, managing partner at California-based midsize firm Hanson Bridgett, which raised 2022 starting salaries for junior associates to $170,000, said the firm didn't consider matching the largest firms' pay. The firm of about 170 lawyers has adopted other benefits such as a one-month sabbatical for lawyers who meet performance expectations and stay for three years, Lawson said.

"We don't have any interest in the salary wars, or the bonus wars that are underway," she said. "We don't think that that's healthy."

Other midsize firms are offering more indirect financial rewards. Cincinnati-based law firm Graydon Head & Ritchey said in a November statement that it will pay off almost $5,000 per year of associates' law school debt.

"There's a retention angle to this, no doubt. We want people to stay, and we want them to feel supported," said Mina Jefferson, Graydon's chief people officer.

With demand expected to stay strong, midsize firms will likely need to keep finding new strategies to lure lawyers, said Summer Eberhard, a partner in recruiter Major, Lindsey & Africa's associate practice.

"I just don't see how it's going to slow down," she said.

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Chinekwu Osakwe covers legal industry news with a focus on midsize law firms. Reach her at Chinekwu.osakwe@thomsonreuters.com.