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2007 Salary Increases
October 10, 2006 Our informal survey of law firms tells us that, overall, law firms seem to be budgeting a little less than four percent for support staff and no increase for the associate scale. There is some deviation by location with Houston and Washington being the major legal markets reporting budgeted increases of five percent.
For associate salaries, the exceptions are those firms who increased starting salaries during 2006 and are, therefore, planning to increase their associate scale for the first three or four years to maintain a differential. There seems to be little change above the sixth year. Additionally, several firms with significant European offices are projecting slightly higher associate raises to correspond with “catch-up” raises being paid to English and German associates.
Another change for 2007 seems to be the elimination of salary caps by many firms. A couple of years ago there was a trend to follow other professional service industry firms and create salary ranges for all staff positions. When an employee hit the top of their range they were not eligible for any increase beyond a modest cost of living amount that all ranges were increased by. Unfortunately, the marketplace is sufficiently attractive in the legal sector that such “red circled” employees (who tend to be the firm’s best people) can walk across the street to another firm, get a raise and have unlimited compensation aspirations. | 
