After years of law school and eighty-hour workweeks, most lawyers aspire to make a substantial annual income. But how much do they actually make?
Answering that question depends on various considerations. Chief among them are variations in salaries between firms and practice areas, which affect decisions as to which is the right option for an individual.
Location can have an enormous effect on a lawyer’s earnings.
Legal Specialization
In general, lawyers specializing in specific legal fields tend to earn higher income than their more generalist counterparts. This may be because these specialists become invaluable as consultants for clients dealing with complex matters.
NALP data shows that starting salaries for newly admitted lawyers vary depending on their specialty and industry of employment; lawyers working in business tend to earn significantly more than their counterparts working for government or nonprofits.
Lawyers specializing in intellectual property law such as patents, trademarks and copyrights typically make above-average salaries. New York attorney David Boies is perhaps best-known in this regard – making millions annually as Chairman of Boies Schiller Flexner LLP.
Specialization can vary depending on law firm size, as dictated by market competition in a particular region. For instance, large New York City law firms tend to pay first-year associates an estimated minimum salary of $160,000 while smaller regional firms typically offer salaries closer to $100k.
As lawyers gain more experience, their salaries usually increase based on the volume and seniority of work taken on by them in law firms. Over time this may even lead to promotions into partnership roles wherein lawyers share in profits from the law firm they practice at.
Legal salary data collected by the Bureau of Labor Statistics indicates that Washington, D.C. boasts the highest-paid lawyers followed by California and then New York state; Montana ranks lowest for lowest paid attorneys followed by South Dakota and Nebraska.
Specialization has become a hallmark of modern legal practice, with both law firms and clients favoring highly-skilled specialists over general practitioners. This trend has had a direct effect on attorneys’ hours worked; those specializing in specific fields often put in more than 80 hours in a work week – an additional factor which can have an enormous impact on legal salaries; those who specialize in high-profile cases while being highly esteemed among their peers tend to enjoy the highest incomes.
Work Environment
Law profession is well known for being competitive when it comes to salary levels – for good reason: A lawyer’s salary can have an enormous impact on a person’s ability to live comfortably and meet financial goals.
However, not all lawyers have equal earning potential when it comes to earning potential. Many factors affect this figure such as legal specialty and working environment choices.
New law graduates entering large New York City law firms tend to earn higher starting salaries than those entering smaller firms, depending on both client needs and firm preferences. A lawyer with specialization in fields such as intellectual property, securities or entertainment may command greater pay than one who focuses on family law or general practice law.
Economic conditions also play a part in how much a lawyer earns; an economic downturn could decrease client demand and financial constraints on law firms, leading to lower pay rates; while periods of economic expansion or increased business activity could boost attorney earnings.
Law firm partnership and hourly rates also play an integral role in how much lawyers make. Many lawyers at large, established firms begin as associates and receive an incremental increase based on years of service to the firm; those working as partners in law firms often earn seven-figure salaries.
On the other hand, there are also high-earning lawyers working in public service or as judicial clerks – according to 2015 NALP data, these positions typically pay a median starting salary of $47,000. Furthermore, self-employed lawyers tend to earn higher incomes than their firm-employed peers as they set their own rates and often charge premium rates. Furthermore, some attorneys have earned themselves an excellent reputation among clients willing to pay extra for top quality representation.
State and City
There are various factors that can determine a lawyer’s salary. These may include their state and city of work, type of legal practice they specialize in and size of law firm they work for – all which have significant bearing on salary. Furthermore, law firms’ internal policies may have an effect; for example some may offer bonuses based on performance such as earning new business or referrals from existing clients.
California and Washington D.C. rank among the highest-paying states for lawyers. Both employ large numbers of attorneys, making it easier for these states to recruit top talent. Furthermore, both states boast lower costs of living compared to others and boast many top law schools.
Illinois, Florida and New York also boast high pay averages for lawyers; Chicago stands out as an especially lucrative market, where an average lawyer earns more than double the national average annually; moreover, Chicago hosts top law firms like Kirkland & Ellis, Sidley Austin, Mayer Brown and Winston & Strawn among many others.
San Jose, CA is another top-paying city for lawyers. Home to numerous tech companies, there’s high demand for technology-related legal services here and the cost of living in San Jose is significantly less than in neighboring San Francisco.
Other top-paying cities for lawyers include New York, CA; Los Angeles, NY; and Philadelphia, PA – where many prominent law firms such as Morgan Lewis & Bockius, Covington & Burling and Skadden Arps operate and can command higher salaries due to handling high-profile cases or corporate transactions.
Type of Employer
Lawyers employed at large law firms in New York City usually abide by a salary schedule similar to the Cravath scale, which ensures first-year associates at all major firms make equal wages upon starting. As such, a new attorney at one of these large law firms should expect an initial starting salary of at least $190,000. With regular annual increases tied to seniority.
Private practitioners have the freedom to set their own wages, although this can be risky as new lawyers often struggle with paying their bills until they build enough of a client base and generate enough revenues streams to support themselves. It would be wise for anyone working for themselves to consult a financial planner in order to gain advice as to how much savings should be put away for emergencies.
While most lawyers work for private or public companies, others are hired by government agencies to perform legal research or write briefs for policymakers or conduct investigations. Such positions typically rely on having expertise in specific areas; however, their pay may not compare favorably with positions within private firms or law companies.
As a new lawyer, it is also essential to keep in mind if the pay scales in your state or city are keeping pace with overall standard of living. During the recession, salaries in some states actually decreased compared to their prerecession levels when adjusted for inflation.
Other elements that impact how much a lawyer gets paid include their education, career path and area of law they specialize in. Lawyers with advanced degrees often command higher fees for services provided. This is particularly true in specialties like intellectual property law, medical malpractices litigation, tax law and corporate and securities law. A career as a lawyer may be rewarding but is highly competitive profession requiring hard work in order to thrive.
