What is going on with NALP/Calgary Salaries?

[RuneScimmy]

I have some questions. Some regarding big law pay/salaries in general and some about the Calgary market in particular. Not sure if this is the place for them, and not sure if that many Calgary big law lawyers are browsing this forum, but if you are, input would be appreciated. They are all related to pay since they are the only types of questions I don't feel comfortable to/don't think it's a good idea to ask lawyers I am meeting and networking with IRL.

For all of this past year, and up to a few weeks ago, all the big law firms in Calgary listed $95,000 as their salary for first year associates (with the exception of Cassels which pays Toronto rates?) Then, about a few weeks ago, all of those listed salaries at the big firms such as BJ, Blakes, McCarthys etc. changed from "$95,000" to "market competitive". Then, just today, I look and see that all the firms completely got rid of their section that lists or talks about salaries for summer students, articling, 1st year associate etc. at all.

1. What in the damn hell is going on here? Does this mean anything at all or could it just be NALP screwing around with their website?

2. Could this be the result of a new salary increase and firms trying to not lay their cards out onto the table right away regarding how much they're increasing their salaries?

3. Why does Cassels pay Toronto rates ($130,000) in Calgary? Does the fact that they're doing that make it more likely that other firms will match eventually?

4. How often do big law salaries in the various Canadian markets increase? I've really only paid attention to them for the past year. Is it an annual increase? Surely with inflation as high as its been, there must be?

5. Any ideas or guesses as to whether big law salaries in Calgary or Canada will increase or keep up with inflation into the next 5-10 years? Highly speculative but just curious if anyone feels like they could justify a prediction.
 

Edited July 30, 2023 by RuneScimmy

[Turtles]

My understanding for several years has been that Cassels (uniquely) pays Toronto rates nationally. It was a selling point in previous Toronto recruits re internal fairness and mobility to move across offices, etc. 

Your point about salaries disappearing from NALP is also true with many Toronto firms. May be a NALP thing, may be part of broader salary reviews I'm not aware of, may be something else, or may be nothing. 

[ccounsel2024]

I called NALP and they told me it's because of the Competition Act amendments. The salaries won't be coming back. 

[RuneScimmy]

5 hours ago, ccounsel2024 said:

I called NALP and they told me it's because of the Competition Act amendments. The salaries won't be coming back. 

Very interesting. I wonder if that act could cause salaries to increase as well.

[Rashabon]

2 minutes ago, RuneScimmy said:

Very interesting. I wonder if that act could cause salaries to increase as well.

On what basis?

[RuneScimmy]

3 hours ago, Rashabon said:

On what basis?

I have no idea if there are or were previously any wage-fixing agreements between firms (obviously since one would probably only know that if they were a partner at said firms), but if there were, and now they can't do that, this could in theory force them to be more competitive with the salaries they're offering right?

Edited July 31, 2023 by RuneScimmy

[Rashabon]

I think if you think that the big law firms entered into explicit wage fixing agreements with one another, sure, you could equally fantasize about a raise as a result.

[RuneScimmy]

1 hour ago, Rashabon said:

I think if you think that the big law firms entered into explicit wage fixing agreements with one another, sure, you could equally fantasize about a raise as a result.

I don't think they did or that it's likely, but who knows what goes on at that level. Might not be such an explicit agreement either, maybe something similar to when the grocery stores all stopped doing covid hero pay at the exact same time because one grocery chain executive sent a "courtesy email" to the others indicating what they're doing. But yes fun to fantasize lol

[Atticus]

Can anyone ELI5 why the Competition Law amendments affected posting of salaries? I don't understand the connection. 

[BlockedQuebecois]

Prior to the amendments, the dominant view was that wage fixing was only illegal if it had an adverse effect on competition. Section 45(1.1) of the Act now makes wage fixing an offence. In its draft guidance, the Competition Bureau took the view that conscious parallelism, which Bay Street firms definitely engage in, coupled with the disclosure of sensitive employee information (e.g. wages and benefits) may constitute a violation of s. 45(1.1). 

Edited August 1, 2023 by BlockedQuebecois

[Jaggers]

I'm not sure that's totally accurate. We've always trained people that any explicit agreement about wages wasn't legal. So of course, nobody made explicit agreements... The new legislation is scaring people, though I think it changes the penalties in a lot more of a material way than the actual substantive obligations. But yeah, everybody is cutting back on information sharing because nobody wants to go to jail for it.

[GoBigOrGoHome]

1 hour ago, Jaggers said:

But yeah, everybody is cutting back on information sharing because nobody wants to go to jail for it.

This seems so dumb because pay transparency laws come into force in BC in November. 

[BlockedQuebecois]

1 hour ago, Jaggers said:

I'm not sure that's totally accurate. We've always trained people that any explicit agreement about wages wasn't legal. So of course, nobody made explicit agreements... The new legislation is scaring people, though I think it changes the penalties in a lot more of a material way than the actual substantive obligations. But yeah, everybody is cutting back on information sharing because nobody wants to go to jail for it.

The reason we advised people not to enter into wage fixing agreements was not because the agreements were illegal, but because obviously an agreement between employers to fix wages would be aimed at harming competition and thus constitute a conspiracy under the Act. The key difference from the amendments is that wage fixing agreements are now per se illegal, and so the Bureau won’t need to prove an adverse effect on the market (which is an element of the conspiracy offence). 

I agree the penalties are harsher and that has attracted more attention, but the substantive obligations have also changed significantly. And the Bureau’s guidance indicates it has an aggressive view on the issue that would criminalize a lot of previously legal conduct. 

[Jaggers]

I'm giving a lot of advice on this topic these days. I'd say our advice on whether you can agree with another employer about wage levels has never changed, but we are certainly giving different advice about what topics can be discussed at inter-industry groups and how they can be discussed.

[RuneScimmy]

So either way, any guesses as to whether this all will have an effect on salaries or not? Even if it isn't because a potential previously allowed salary agreement is cancelled, but maybe because with less info sharing firms will up their salaries to make sure they aren't paying under par?

Also, still just wondering how often big law firms have historically increased salaries? Yearly or every few years or something?

Thanks all for all the interesting insight

[QueensDenning]

4 hours ago, RuneScimmy said:

because with less info sharing firms will up their salaries to make sure they aren't paying under par?

Firms will still know what other firms are paying - people talk. 

[helloall]

1 hour ago, QueensDenning said:

Firms will still know what other firms are paying - people talk. 

Barely. People already tiptoe around culture and bonus structure discrepancies, salaries aren't gonna be any different.

[QueensDenning]

13 hours ago, helloall said:

Barely. People already tiptoe around culture and bonus structure discrepancies, salaries aren't gonna be any different.

I don't see how firms would be able to keep a full associate class raises under wraps. It's not that large of a community, everyone at each firm has lots of friends/colleagues working at other firms. It might not be posted on these internet forms, but word will travel around if there is a raise. 

[Ohshmagoda]

Historically, when a new pay scale is introduced at a peer firm the news spreads almost immediately and others have matched the new scale within a couple weeks. This news never spread through NALP in the past, so I’m not sure how much anything will change.

[CDNLaw]

On 8/3/2023 at 10:20 AM, QueensDenning said:

I don't see how firms would be able to keep a full associate class raises under wraps. It's not that large of a community, everyone at each firm has lots of friends/colleagues working at other firms. It might not be posted on these internet forms, but word will travel around if there is a raise. 

Some firms in Calgary don't seem to care about paying less and Summer Students/Articling Students often times do not find out until an offer comes at the end of interview week.

There is one firm in particular (will not be naming it) that consistently pays 10-15k under market for students; however, Calgary is a small legal community and it is tough for students to leave when they are starting out their careers, even when they are being underpaid compared to their peers. There are strong rumours that Calgary firms are increasing pay again and it will begin this summer (by $5-$10k for each band) - this seems to have been directly tied to the new competition legislation. It will be interesting to see which firms keep pace and which continue to justify underpaying their students. 

For context, market price for Calgary Biglaw is as follows (minus Cassel's): 

• $70k-$80k Summer at a firm (with bonuses between $5k-$10k for signing articling) -->In-house jobs will pay articling salary (~$80k) for Summer Students
• $80-$85k for Articling
• $95k for 1st year associate
• $115k-$120k for 2nd year associate (bonus ranging from 5%-30% with an average of ~20%. Factors for bonus vary by firm)

As a reminder, in Calgary you become a 1st year associate when you complete articles and are called to the bar, and you become a 2nd year associate the next January (so, you're a 1st year for roughly 5 months or less). I might be wrong (and please correct me if I am), but you sit roughly a year ahead in the pay-scale than Eastern Canada lawyers due to the weird rollover in January (e.g., you're a 2nd year in Calgary while Toronto lawyers of the same call are 1st years). Putting this out there as it can be tough to come by this information and I had friends that got low balled without knowing it.

[2easy]

How many billable hours are expected at a firm in Calgary?

[CDNLaw]

2 hours ago, 2easy said:

How many billable hours are expected at a firm in Calgary?

1700-1800 for biglaw. 1800 is on the high end and most land closer to 1700.