Lawyers, by their very nature, are competitive. So, it should come as no surprise that for many lawyers, “winning” means making more money than other lawyers.
If you’re in Big Law, it’s not very difficult to get a good idea whether you are “winning.” Associate salaries are widely publicized, and to a lesser extent, so is partner compensation. Indeed, a lot of the jumping around one sees in Big Law, is driven by the knowledge that, at least when it comes to compensation, you know whether the grass is greener on the other side of the fence.
But what about those of you who are solos or work in small law firms? Comparative salary information is not so easy to come by. The legal website Above the Law, recently published data that will help. It’s called the 2023 Solo & Small Firm Compensation Survey Report. It’s the fifth survey it’s completed, and it is based upon responses from more than 1,000 attorneys working at law firms with fewer than 50 lawyers.
Here are some highlights for those of you who don’t have the time or the patience to read the entire survey (a little bit more than 30 pages).
The Big Picture for Small Firm Attorney Compensation
Without factoring in firm size, location, position (associate v. partner), gender, or practice area, almost a quarter of small firm lawyers earn between $150,000 and $249,000. Thirty-six percent earn more than a quarter of a million dollars, and 14% earn more than half a million. While I’m pretty sure that more than 14% of Big Law attorneys earn more than half a million dollars, small firm lawyers can still earn some big bucks.
Attorney Compensation by Firm Size
A few statistics stand out for me. First, earnings by solos are not too shabby. Over half earn over $150,000, and a third earn more than $250,000. And bigger doesn’t necessarily always mean better. You’re less likely to earn more than $250,000 at a 26-50 attorney firm (32% do) than at smaller firms (firm sizes measured are 2-5, 6-10, 11-25), where the range is 36% to 39%. But when you break it down further by looking at partner and associate compensations, it seems that being a partner at a larger firm (26-50) is more lucrative (more than $500,000) compared to smaller firms. The same is true if you’re an associate. While most associates earn between $100,000 and $150,000, you are more likely to earn more than $150,000 if you work at the largest small law firms surveyed (26-50).
Attorney Compensation by Gender
It is certainly not news that men tend to earn more than women. That’s true in Big Law and everywhere else. But one statistic stood out for smaller firms. Men are three times more likely than women to earn over half a million dollars (18% vs. 6%).
Origination and Attorney Compensation
Origination is alive and well in smaller firms. Half of the surveyed firms base partner compensation on origination to at least some extent. Further, the larger the firm, the more likely origination plays a role in compensation.
How Attorney Compensation Varies by Practice Area
Some of the highs: the solos who earn the most practice personal injury law, and more than half earn more than $500,000. Some of the lows: trusts and estates and general practice firms earn the least for solo attorneys. Half earn less than $100,000. Overall, corporate, real estate, intellectual property and commercial litigation partners earn more than other practice areas.
Conclusion
I’ve always maintained that lawyers generally are quite content with what they earn. It’s only when they find out what their partners or competitors are earning that they get bent out of shape. So please keep your perspective as you digest this information.
If you were satisfied with your income before reading this article, remember that nothing has changed (except the data you have). If you weren’t satisfied before, maybe this article will motivate you to get the help you need to make some overdue changes.
Feel free to reach out to me to discuss this further. You can reach me at 612-524-5837, or contact me online.
