Big Law Salary Increase

[Jaggers]

I like to complain about how expensive Bay St rates are and how associates are overpaid, but it amazes me that salaries have finally gone from $100K in 2008 to $130K in 2021, basically an increase of 2% a year. Law students command decent salaries for sure, but don't appear to have much bargaining power! I guess students really are fungible, and as long as you pay enough to attract students (anyone will be fine) rather than having them go to NY or in house, the firms are fine.

[Yyzer]

21 minutes ago, chicken said:

Confirmed McMillan matching at 130k per year for first year associates. Heard this also. 
 

Seems like the non “seven sisters” are coming along 

Seems strange to exclude a class though. My firm isn’t doing this. Have you heard of others? 

[BlockedQuebecois]

36 minutes ago, Jaggers said:

I like to complain about how expensive Bay St rates are and how associates are overpaid, but it amazes me that salaries have finally gone from $100K in 2008 to $130K in 2021, basically an increase of 2% a year. Law students command decent salaries for sure, but don't appear to have much bargaining power! I guess students really are fungible, and as long as you pay enough to attract students (anyone will be fine) rather than having them go to NY or in house, the firms are fine.

In fairness, firms didn’t need to actually compete with NY until recently. New York was paying double Toronto rates when I started at my firm, and students weren’t going to NY because most couldn’t get interviews, let alone offers. 

And it remains to be seen if “COVID bonuses” become the norm or not. If they do, you’re looking at ~170k gross for a first year, rather than ~115k gross in 2008. 

Edited November 3, 2021 by BlockedQuebecois

[Jaggers]

I never once got a bonus, because I didn't work that hard, so that would still be $100K in 2008 🙂

[Guest]

7 hours ago, BlockedQuebecois said:

In fairness, firms didn’t need to actually compete with NY until recently. New York was paying double Toronto rates when I started at my firm, and students weren’t going to NY because most couldn’t get interviews, let alone offers. 

I think this is a key part of the whole thing. A few years ago NY firms were calling Bay Street associates on their direct lines in an attempt to draw as many people as possible, but that was a blip. I don't think there's been such a sustained pressure from US firms (not even just NYC) in a while, if ever.

Though none of them would outright say it, from speaking with the higher ups at my firm throughout the pandemic, I got the sense that they were feeling like, "Let's wait as long as we possibly can to see if US poaching cools off and the COVID exodus slows, in case we can avoid raising salaries at all." Obviously that hasn't really happened, and here we are now.

[disgruntledpelican]

12 hours ago, Jaggers said:

I like to complain about how expensive Bay St rates are and how associates are overpaid, but it amazes me that salaries have finally gone from $100K in 2008 to $130K in 2021, basically an increase of 2% a year. Law students command decent salaries for sure, but don't appear to have much bargaining power! I guess students really are fungible, and as long as you pay enough to attract students (anyone will be fine) rather than having them go to NY or in house, the firms are fine.

Meanwhile, billing rates seem to have gone up a lot quicker and associates are working much more than in the past. But as it’s a business decision it totally makes sense as there’s always going to be a pipeline of enthusiastic graduates willing to take the spot of people who’ve been chewed up and spit out by the system. 

[mtler]

On 11/2/2021 at 7:51 PM, ABCDEFGHIJKLMNOPQRSTUVWXYZ said:

so the new starting salary would be 115k? which according to the numbers is exactly Vancouver's which i find interesting because in the past it seemed Montreal's was a bit more than vancouver's, if im not mistaken  

This would seem to be the case. I also recall Montreal normally being a bit higher than Vancouver, but the different levels seem to be relatively aligned. That said, market practice in Montreal seems to be that compensation after year 3 is variable within a certain band (which can be as much as 30k for associates with the same number of years of practice).

[Rashabon]

New York is hot enough that some recruiters are emailing me every single week with the same email. Not only that, they have the balls to reply to their own email to preserve their outreach.

One recruiter emailed me 3 times between June 29 and July 7 on the same thread and then he repeated the pattern October 28 to November 4.

Very impressive. If you're a recruiter and a realtor on the side you can run the same business twice basically.

[VanCity250]

Any updates/rumours for Bennett Jones?

[BlockedQuebecois]

Tell me you just got hired at a specific firm without telling me you just got hired at a specific firm. 

You may want to consider editing your post, since I can’t imagine that firm hired a boat load of Windsor 2Ls. 

FWIW, though, I haven’t heard anything about that firm. 

[DiamondHands]

On 10/20/2021 at 4:47 PM, Ramesses said:

Calgary 1st year went up to $105k. Articling students to $72k or $75k

Can you elaborate on which firms this applies to?

[boyo]

Apologies if this has already been mentioned, but is there any news on whether these raises are trickling down to articling students? Are firms likely to change the compensation for the incoming students?

[QueensGrad]

1 hour ago, boyo said:

Apologies if this has already been mentioned, but is there any news on whether these raises are trickling down to articling students? Are firms likely to change the compensation for the incoming students?

So far no Articling student raises.

[easttowest]

4 hours ago, boyo said:

Apologies if this has already been mentioned, but is there any news on whether these raises are trickling down to articling students? Are firms likely to change the compensation for the incoming students?

Students got a raise for the 2019-20 class. So in a sense, the raises are trickling up. 

[boyo]

11 hours ago, QueensGrad said:

So far no Articling student raises.

Sorta disappointing to hear. Thanks anyway!

[boyo]

On 11/17/2021 at 3:34 PM, easttowest said:

Students got a raise for the 2019-20 class. So in a sense, the raises are trickling up. 

Was a very different market in 2019-20.

[chaboywb]

34 minutes ago, boyo said:

Was a very different market in 2019-20.

I'm not getting the impression firms are having trouble finding articling students. Articling student pay at big firms had nearly caught up to associate pay - it made sense for associates to get a bump.

[Rashabon]

Yeah like I think students need a bit of perspective - these raises aren’t happening in a vacuum. It’s a business decision. Articling students aren’t hard to come by which means there’s no major impetus for a further raise at this stage.

[boyo]

16 hours ago, chaboywb said:

I'm not getting the impression firms are having trouble finding articling students. Articling student pay at big firms had nearly caught up to associate pay - it made sense for associates to get a bump.

Totally fair, but you do see a lot of first year associates leaving for NY/CA. It seems firms can build a lot of goodwill with a salary raise for students. Such a small cost against having them leave once they become associates.

Quite a few summer students have left for NY instead of returning to article. Sure at this stage the student isn't all that useful for the firm, but better to have them than not.

[Deadpool]

3 minutes ago, boyo said:

Totally fair, but you do see a lot of first year associates leaving for NY/CA. It seems firms can build a lot of goodwill with a salary raise for students. Such a small cost against having them leave once they become associates.

Quite a few summer students have left for NY instead of returning to article. Sure at this stage the student isn't all that useful for the firm, but better to have them than not.

A salary raise is not going to have a major impact on deterring people, especially junior calls with fewer ties and commitments in Canada, from making the jump to a hot international market. Canadian Big law employers simply cannot match the salaries being handed out in the US, UK, Singapore, etc. 

[BlockedQuebecois]

If a student is willing and able to go to New York, Toronto big law can't compete with it. Articling students make about $98,800 annualized, at an actual cost of about $76,000 in the calendar year. 

Cravath scale this year, including bonuses, is $293,000 Canadian. 

No raise is going to deter people from going south if they want to and can find a job. 

Edited November 19, 2021 by BlockedQuebecois

[KOMODO]

2 hours ago, BlockedQuebecois said:

If a student is willing and able to go to New York, Toronto big law can't compete with it. Articling students make about $98,800 annualized, at an actual cost of about $76,000 in the calendar year. 

Cravath scale this year, including bonuses, is $293,000 Canadian. 

No raise is going to deter people from going south if they want to and can find a job. 

That's completely insane 🤯

(I'm not arguing with the accuracy of it. It's just wild seeing the difference in numbers, I guess the exchange rates insulate us sometimes when we're comparing).

[boyo]

7 hours ago, BlockedQuebecois said:

If a student is willing and able to go to New York, Toronto big law can't compete with it. Articling students make about $98,800 annualized, at an actual cost of about $76,000 in the calendar year. 

Cravath scale this year, including bonuses, is $293,000 Canadian. 

No raise is going to deter people from going south if they want to and can find a job. 

No doubt there are those determined to go and will go regardless, but there are definitely people on the edge, and why wouldn't an extra 500 bucks a week help them decide? Sure it's not NY money but could make a difference. I still think that NY is a harsher working environment over all so it's not just about the money.

[Hitman9172]

1 minute ago, boyo said:

No doubt there are those determined to go and will go regardless, but there are definitely people on the edge, and why wouldn't an extra 500 bucks a week help them decide? Sure it's not NY money but could make a difference. I still think that NY is a harsher working environment over all so it's not just about the money.

It very likely is harsher in NY, but from having a bunch of friends that have gone down south and many more that are constantly being recruited by US headhunters, I find there's generally 2 camps, other than those who are super gung-ho about going to NY:

1) those who would basically never go to NY, no matter how much money you offer them, because the lifestyle isn't for them. The Canadian firms have little incentive to raise salaries for them as they're unlikely to leave for NY. The bigger incentive for the firms is to raise salaries to make going in-house more painful for this cohort.

2) those who are on the fence about going to NY, meaning they think they could probably live that lifestyle. The firms still have little incentive to raise salaries for them as the pay gap between NY and Canadian firms is so huge that even an increase in salary is unlikely to be the deciding factor in convincing this group to stay. It's usually other factors like proximity family/friends, desire to live in a certain Canadian city, or side endeavours (volunteer/business) that play a much larger role in keeping this group of associates in Canada.

 

[Jaggers]

Yeah, it's really in house they're competing with. They'll never compete with the US firms on a salary basis. But in house positions for 4-5 year associates pay $180K+ these days, which is pretty competitive all things considered.

And they're competing with each other, of course, once someone has announced.