The big news in this report is sobering: The number of large firms paying starting salaries of $160,000 has contracted. $160,000 was the median starting salary from 2008-2011 for associates at the largest firms (those with more than 700 lawyers). In contrast, the median for 2012 associates at those firms is just $145,000. The median starting salary in BigLaw has fallen back to 2007 levels.
This information appears to be reliable. NALP obtained entry-level salary reports from 83 offices that are part of firms with more than 700 lawyers. And NALP has always been a BigLaw organization, with most of its private practice members coming from that sector of law practice: NALP's online directory lists only 30 law firms with 25 or fewer lawyers.
But NALP's salary report doesn't stick to BigLaw. It also contains this nugget: "the overall median first-year salary at firms of all sizes was $125,000 [in 2012], up from $115,000 in 2011." Even in firms of 2-25 lawyers, NALP happily reports, median starting salary was $70,750 in 2012.
What? Anyone who has talked to recent law graduates knows those numbers are way off base. Small firms with a median starting salary of $70,750? Firms overall paying new lawyers a median of $125,000? How could NALP possibly come up with these numbers?
The answer is that NALP received information from a tiny number of small firms: Just 10 offices nationwide provided starting salaries for firms in the "2-25 lawyers" category. Those ten firms can't possibly offer representative information about starting salaries at small firms. Yet NALP claims they do, with a bold header asserting that its "Data Represent Broad-Based Reporting."
NALP compounds its misleading information by assuring readers that "almost 10% of respondents represent[ed] firms of 50 or fewer lawyers" so "the report sheds valuable light on the breadth of salary differentials among law firms of varying sizes at the national level." This statement suggests two things to readers: (1) Only about 10% of law firms have 50 or fewer lawyers, so that percentage affords representative information for NALP's survey. (2) Even at the smallest firms in this group, the median starting salary is $70,750.
NALP knows these implications are wrong. In addition to conducting this salary survey, which is heavily slanted toward large firms, it also collects employment data directly from law schools. NALP's own report on the Class of 2011 shows that 42.9% of the graduates who entered private practice joined firms of 2-10 lawyers. Another 10.5% of those graduates went with firms of 11-25 lawyers, while 6.1% joined firms of 26-50 lawyers. So 59.5% of new law firm associates joined a group that NALP believes can be represented by "almost 10%" of the responses to its salary survey.
The graduates who joined smallLaw in 2011 reported median salaries of $50,000 at the smallest firms (2-10 lawyers) and $65,000 at firms in the next category (11-25 attorneys). Even those reports are wildly optimistic: Only 44% of graduates taking jobs at these small firms report their salaries, compared to 93% of graduates who work for firms of more than 500 lawyers. Graduates are more likely to report high salaries than low ones, so the reported salaries for these small firms almost certainly skew strongly toward the high end of the spectrum.
What about that overall median for lawyers entering private practice? Based on its "salary survey," NALP proudly declares that the median starting salary for all law firms rose from $115,000 in 2011 to $125,000 in 2012. But the actual graduates of 2011 reported a median starting salary at law firms of $85,000. Again, that number almost certainly is too high, because it omits more than half the salaries for lawyers at the smallest firms. But even that inflated number is nowhere near the $115,000 median that NALP's "salary survey" claims for 2011. The latter number, just like the $125,000 claimed for this year, stems from a survey that draws disproportionately from BigLaw--and almost entirely ignores the category of law firms that more than half of private practice attorneys actually join.
C'mon, NALP, I thought law schools and other organizations were going to stop distributing this type of grossly misleading information. Do you really want potential lawyers reading that the median starting salary in all law firms was $115,000 in 2011, when your own data show that it was $85,000 at best? Are you really going to make representations about firms of 2-25 lawyers--a category that employed 9,417 graduates in 2011--based on responses from 10 offices? NALP should issue a clarification pronto. Even better, NALP should study the legal employers who actually hire a majority of our graduates--a group that is itself dwindling fast.