How Big Law Partner Pay Outran Associate Salaries in a Flash

Welcome back to the Big Law Business column. I’m Roy Strom, and today we look at how quickly partner pay is rising relative to associate pay scales—and what that means if Big Law faces a recession. Sign up for Business & Practice, a free morning newsletter from Bloomberg Law.

Last week, I wrote about Big Law firms preparing for a recession. I showed how since the last recession associate salaries have grown significantly, which could make it harder for law firms to avoid layoffs if revenue dries up.

I also pointed out that partner profits grew even faster than associate salaries in recent years. But I didn’t say by how much.

The difference is bigger than I expected. It says a lot about shifts in the Big Law talent market in recent years—and how firm leaders may think about responding to a recession.

In short, firms are better prepared today to sacrifice profits to keep associates employed than they were heading into the pandemic recession—when some firms promised to do just that. The question is whether partners will have the desire—or managing partners the leadership capital—to do it again.

First-year associate pay rose 48% from 2012 to 2024 in the industry’s prevailing Cravath pay scale, while compensation for seventh-year associates jumped by 78% during the same time.

Here is the partner pay comparison: 141%. That’s how much profits per equity partner have grown at the 50 largest firms by revenue since 2012, according to data from The American Lawyer. (See the end of this column for a note on my methodology.)

It’s not surprising to most people, especially in 2025, that the owners of a business are getting larger pay increases than their employees.

But it’s interesting that, in Big Law, this trend only began recently at the largest firms.

The seventh-year salary grew faster than average partner profits from 2012 through 2018. Partner pay only started racing away from the pack over the past few years.

Naturally, the question is: Why?

The first explanation is easy. Law firms haven’t raised associate pay much in recent years.

Seventh-year lawyers took home $560,000 in salary and bonuses last year, according to Biglaw Investor data. That was $20,500 more than what a seventh-year earned three years earlier, in 2021. It marked the smallest three-year growth for senior associates, going back to at least 2015.

For comparison, seventh-year compensation rose $102,000 between 2018 and 2021. Had that absolute growth repeated itself from 2018 to 2021, the seventh-year pay scale would have risen more than 100% compared to 2012—much closer to the partner profit figure.

Curbing associate salaries, a major cost for law firms, directly fuels profit growth.

Another explanation is that the biggest firms by revenue today are more profitable relative to their peers than ever before. That is thanks to the influence of the largest, most profitable law firm: Kirkland & Ellis.

I mean that—Kirkland influence—both figuratively and literally.

Figuratively, more law firms today are run like Kirkland. Any 2012-2024 analysis basically encapsulates the period in which lockstep compensation was left for dead. Kirkland’s pay model, and the higher average profits per equity partner that come with it, has largely taken over the world’s largest firms.

As a result, the 50 largest firms today are a group of higher-profit firms than they were in 2012. The top 50 firms by revenue last year ranked, on average, as the 33rd most profitable firm by profits per partner. That compares to a group in 2012 that ranked as the 44th most profitable by PPP, American Lawyer data show.

Kirkland’s influence is also literal.

Its weight now influences the industry profitability scale more than it did in 2012. The law firm had 325 equity partners in 2012, according to AmLaw data. The fact that they earned $3.25 million on average, eighth-most among all firms, didn’t mean that much in the grand scheme of this analysis.

Last year, Kirkland’s 573 equity partners earned more than $9.25 million apiece—more than at any other firm.

The firm’s profit pool is now between two and three times larger than any law firm outside of Latham & Watkins. It skews the numbers for the entire group. And Kirkland’s partner pay has outgrown the associate scale much faster than the industry average. The firm’s PPP has grown by 185% since 2012.

All of this is to say: The next time the industry has to batten down the hatches and conserve cash in a recession, there is plenty of room for profits to take a dip relative to associate pay. That is a concept some firms were willing to accept in the lead-up to the pandemic, when they promised that equity partners would take a hit to keep associates employed.

The challenge for law firm leaders if there’s another recession will be to socialize that idea among their partners—who are only used to seeing pay go one direction: up.

A quick note on methodology: Some readers may say that comparing a pay scale of a seventh-year associate is not similar to a law firms’ average partner profits. There is some truth in that. Associates don’t earn a seventh-year salary over multiple years the way the charts in this story may visually imply. They are getting annual raises larger than the infrequent increases in the broader pay scale shown in these charts.

But partners don’t earn a law firm’s average partner profits over multiple years, either. That metric, over time, also represents some version of a pay “scale” for an individual firm’s overall equity partnership. The fact that there was a long period of time where these two metrics moved similarly helps prove that point.

In real life, equity partners at some firms earn points or shares. The growth of those individual share values would perhaps be a better metric for this comparison, but they are largely unknown. Either way, there is little doubt that successful equity partners at highly profitable firms are now earning larger raises relative to associates—and that trend has surged in recent years.

One way to view the different talent markets is like the arbitration and free agent system in baseball. Associates earn a pay scale the way a young Major League Baseball player’s salary is fixed by its arbitration system. Once an associate makes equity partner, the equivalent of six years of MLB service time, they are more free to move between firms and sign at free agent prices. In baseball, those free agent prices have also exploded relative to arbitration salaries in recent years. It takes time for the arbitration market to catch up after periods of free agency inflation. I expect that may be true in Big Law, too.

Worth Your Time

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On General Counsel: UnitedHealth Group Inc.'s chief legal officer Christopher Zaetta was covered by the company for $213,100 in security costs last year, Brian Baxter reports.

On Litigation Funding: Emily Siegel reports that one litigation funder is laying off employees, and the state of Georgia passed a law regulating the $15.2 billion industry.

That’s it for this week! Thanks for reading and please send me your thoughts, critiques, and tips.