© 2016 The Texas Lawbook.
By Mark Curriden
(June 13) – Bracewell, Akin Gump, Locke Lord, Baker Botts, Yetter Coleman and Gibson Dunn are the latest law firms operating in Texas to raise the annual base salaries of the hundreds of associate-level lawyers at the law firm.
Managing partner Andy Baker told 108 summer associates meeting Saturday at a firm retreat in Austin that Baker Botts will match 14 other law firms in Texas hiking the pay of hundreds of first-year associates to $180,000 – $9,000 more than the state pays Texas Supreme Court Chief Justice Nathan Hecht.
Bracewell, Akin Gump and Locke Lord are the latest to join Baker Botts, Vinson & Elkins, Yetter Coleman and McKool Smith as Texas-based law firms to match New York corporate law firm powerhouse Cravath, Swaine & Moore, which announced this past week that it raised associate compensation.
Eight national law firms that have large operations in Dallas and Houston – Kirkland & Ellis; Latham & Watkins; Sidley Austin; Simpson, Thacher & Bartlett; Skadden Arps; Weil, Gotshal & Manges; Gibson, Dunn & Crutcher; and Winston & Strawn – confirmed that they are matching the pay increase.
V&E sent a memo Thursday announcing the 12 percent compensation hike to the firm’s 400-plus associates and the 64 newly-minted law school graduates scheduled to join the firm this fall.
While most of the attention has focused on baby lawyers, senior associates – those in their eighth and ninth years on the job – will see their base pay jump to $315,000 or more, according to the V&E memo.
With year-end bonuses ranging from $30,000 to $100,000, their total compensation will climb to $400,000 or more, lawyers said this week.
The great majority of Texas law school graduates, however, will not even be considered by law firms for these high-paying jobs.
“I was paid $12,600 when I first started practicing law,” said Mike McKool, founder of McKool Smith. “The world has definitely changed.”
Legal industry analysts say most Texas law firm leaders know that they will eventually have to match the pay hike or find themselves at a disadvantage in recruiting new legal talent in law schools across the country.
In 2013, the Brewer firm in Dallas raised its first-year associate pay to $185,000. That same year, Houston litigation boutique Ahmad, Zavitsanos, Anaipakos, Alavi & Mensing increased its first-year associate pay to $170,000.
The 40 largest corporate law firms operating in Texas hired between 600 and 800 new law school graduates each year for the past decade.
But more than 80 percent of the 2,000-plus law students who graduate annually from Texas law schools do not have a chance of landing one of these positions.
Business law firms in Texas hire only law students who graduate in the top 20 percent of their class. Some restrict it to the top 10 percent.
In addition, many of the corporate national law firms recruit only at top tier law schools, such as the University of Texas School of Law and SMU Dedman School of Law in Texas and nationally elite law schools at Harvard, Yale, Stanford and Vanderbilt.
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