U.S. law firm partner pay hits new highs, with deal lawyers in the lead
(Reuters) - Average annual pay for U.S. law firm partners reached $1.12 million in 2021, as heightened client demand buoyed firm profits, according to a report released Tuesday by Major, Lindsey & Africa (MLA).
The legal recruiting firm's 2022 partner compensation survey said average pay was higher than any time since it started tracking partner compensation in 2010.
The report is based on survey responses from 1,815 partners in the United States between May 5 and July 18 of this year.
The compensation growth was driven by "virtually every single practice area" said Jeffrey Lowe, global practice leader of MLA's law firm practice and author of the survey.
Average time billed by partners reached 1,721 hours, "a whole week" over the 1,680 billable hour figure the survey reported in 2020, Lowe said. Non-billed time dropped from the last survey.
Corporate partners reported the highest average total compensation at around $1.49 million, marking a 26% increase - the highest percentage hike among practice areas, according to the survey. The second highest percentage increase was for litigation partners, who saw average pay increase 17% to $1.05 million.
Law firms saw surging demand for corporate work in 2021 as M&A activity boomed, though demand has slowed this year amid a cooldown in dealmaking.
Labor and employment partners reported the lowest average total at $653,000, which was a 6% increase, while tax and ERISA partners saw a 9% decline in compensation to an average of $1.15 million.
In a persisting gender gap, male partners reported average compensation of $1.21 million in 2021, while female partners said they received an average of $905,000, the report said. The 34% gap, which has narrowed from 44% in the 2020 survey, is in large part due to male partners surpassing female counterparts in business origination, MLA said.
Other highlights from the survey include:
- Median compensation for all partners was $675,000
- Partners in Dallas reported an 87% increase in average compensation, with partners in Atlanta, Houston and Minneapolis also reporting large gains. Those in Philadelphia, Los Angeles and Miami reported largest percentage decreases. (Lowe cautioned against reading too much into these figures, however, citing lower survey participation in some of those cities.)
- When rating the importance of the ability to work remotely, 33% of respondents said it was "very important" and 10% said it was "so important I would change firms." Only 5% of partners said it was "not important at all."
- Of the 7% of partners who said they relocated due to the pandemic, 30% said they expected to move back when their firm fully reopened, while 53% said they would not move back. The highest percentage of partners who relocated were from New York at 16%, with San Francisco and Philadelphia next at 15% and 11%, respectively.
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