Partner compensation at AmLaw 200 firms hit a record high last year, with average remuneration hitting $1.4m according to research by recruitment specialists Major Lindsey & Africa (MLA).
The 2024 Partner Compensation Survey found that average partner pay had jumped by 26% between 2021 and 2023 and had almost doubled since 2014, when it stood at $716k.
The report was based on pay respondents received in 2023, when despite a downturn in global M&A, consistently high demand for legal services – particularly in litigation – and rising billing rates meant compensation continued to grow. The average hourly billing rate for all 2024 survey respondents was $1,114, up 36% from 2022 ($819) and a whopping 83% from 2014 ($608), more than double the rate of inflation in the same period.
The pay boom looks set to continue as law firms reap the rewards of an uptick in global M&A, which jumped 16% in the first nine months of the year compared to year-prior levels to $2.3trn, according to data published by London Stock Exchange Group.
MLA’s research found median compensation for the 2024 respondents was $800k, up 19% from 2022 and 68% from 2014. It noted that the significant increase in average compensation compared to the median “made it clear that compensation at the highest levels was growing at a more substantial rate”.
Equity partner pay continued to substantially outstrip non-equity partner pay, averaging $1.94m compared to $588k in the latest survey, though pay has surged in both categories since 2022, rising 31% and 21% respectively – the largest increases in the survey’s 14 years of data.
The report noted the dramatic rise in non-equity partner pay, which typically saw only single-digit growth between biennial surveys, suggested law firms’ need to attract and retain talent at the non-equity level had significantly impacted compensation strategies.
The survey also found that the gap between male and female partner compensation remained large, at 29%, but had narrowed from 34% in the 2022 survey and from 44% a decade ago. Notably, the rate of increase in women’s compensation matched that of men’s for the first time, with both groups seeing a 37% rise since the 2022 survey.
The survey found that the continuing discrepancy was driven partly by men “significantly outpacing” women in originations, averaging $3.9m compared to women’s $2.4m, and, to a lesser extent, billing rates.
Corporate partners earned the most, averaging just over $1.9m, while labour and employment partners brought in the least on average, at $930k.
Despite their growing pay packets, partners’ overall satisfaction with their earnings had decreased slightly, with 61% saying they were either “very satisfied” or “moderately satisfied”, compared to 64% two years ago. Perhaps unsurprisingly equity partners were notably happier than their non-equity colleagues, with 71% very or moderately satisfied compared to 46% of non-equity partners.
There was also a trend of partners being more satisfied with their pay the longer they had been at their firm. Meantime those who had joined their current firm as a lateral hire were slightly more satisfied with their pay than those who had been internally promoted (64% and 60% respectively), perhaps an indicator of the higher compensation that lateral hires can demand in a highly competitive recruitment market.
There was a wide variation between locations included in the survey, with New York partners enjoying the highest average pay, at just over $2.3m. Meantime partners in Denver, where compensation was lowest on average, were paid just over $730k.
Silicon Valley partners had the highest increases in pay by percentage, growing 49% since 2022, meaning the region ranked in second place behind New York with compensation averaging $2.24m.
The survey follows a recent report by PwC which found the UK’s top 10 law firms had upped their rates by nearly 40% in the last five years, from £321 in 2019 to £449 this year, fuelled partly by the growth of their US rivals in London.
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