Average pay for partners in US "Big Law" has soared from $700,000 to $1.4 million in the last decade, a trend fueled by bidding wars for star corporate attorneys. Top "rainmakers" can command recruitment offers exceeding $25 million annually. Even bankruptcy law partners are charging over $2,500 an hour, while first-year associates supporting them bill nearly $1,000 an hour, pushing the legal sector's compensation beyond the financial industry's "masters of the universe."
This dramatic increase in pay is driven by the expansion of the private equity industry into a multi-trillion-dollar "alternative assets" sector, creating demand for specialized lawyers such as fund formation specialists. A $500 million fundraising effort can generate as much as $5 million in legal fees. Firms are abandoning traditional lockstep compensation structures, favoring models that reward top profit generators and creating "non-equity" partner statuses to differentiate pay.
The "Cravath scale" set a de facto benchmark for associate salaries, with first-year associates earning $225,000 and seventh-year associates making $420,000. Despite a slump in corporate deals, industry observers anticipate these upward trends in remuneration will continue, as top lawyers service Fortune 500 companies and private equity firms, generating tens of millions of dollars in revenue annually. However, some lawyers express concern about the negative impact of these pay differentials on firm culture and morale.
