21 October 2016

Sharp pay rises for partners at US firms

A major survey of law firm partners in the US has revealed a significant rise in compensation in the past two years.

By Victoria Basham


The 2016 Partner Compensation Survey is based on responses from more than 2,100 partners from Am Law 200-, NLJ 350- and Global 100- size firms in the US. It showed that average partner compensation had risen by 22 per cent to $877,000 since a similar survey was conducted in 2014 and that median compensation had increased by 21 per cent from $475,000 in 2014 to $575,000 in 2016.
The average billing rate for all respondents was $685, an increase of 13 per cent from 2014’s $608.
Male partners continue to significantly outpace female partners, earning an average of $949,000 to women’s $659,000. However, the 44 per cent difference in compensation is slightly lower than the 47 per cent differential reported in the 2014 survey.
Originations, which are a key factor in compensation, may partly explain the gap. The study found that male partners reported average originations of $2.59m, an increase of 18 per cent from the previous survey, while female partners posted average originations of $1.73m, up a significant 40 per cent from 2014.
Geographic location also significantly affected compensation, with the average going from a low of $564,000 in Seattle to a high of $1.43m in Silicon Valley.
Meanwhile, equity partners were found to earn roughly three times more than non-equity partners. The average for equity partners was $1.1m, up 13 per cent from 2014, compared to $367,000 for non-equity partners, an increase of 9 per cent.
Equity partners reported average originations of $3.1m, an increase of 10 per cent, while non-equity partners reported an average of $720,000, up just 2.9 per cent.

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