From Manhattan to Minneapolis, ripples spread since Big Law increases

  • Robins Kaplan increases starting salary for associates from $ 140,000 to $ 180,000
  • Rise of remote working makes Midwestern companies more directly compete with New York wages

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(Reuters) – When New York law firms began raising partners’ starting salaries to $ 205,000 in June, executives at Minneapolis-based litigation firm Robins Kaplan thought it was only ‘it’s a matter of time before they feel the wage pressure.

Indeed, local competitors, notably Faegre Drinker Biddle & Reath and Dorsey & Whitney, have increased associate salaries in order to compete nationally for associate talent. Robins Kaplan, which has about 250 lawyers, will follow suit on Oct. 1 and increase first-year associate salaries from $ 140,000 to $ 180,000 to keep pace.

Ronald Schutz, chairman of the board of Robins Kaplan, spoke to Reuters this week about the pay rise, what partners at a law firm want and why the firm has put emphasis on hiring former federal employees.

The conversation below has been edited for clarity and length.

REUTERS: Why raise wages now?

SCHUTZ: We’ve always matched most of the companies here in town with first-year salaries. The going rate in Minneapolis is $ 180,000. There are a few exceptions. Jones Day has an office here and they use a national pay scale in Minneapolis. But the other big firms in town — Faegre and Dorsey & Whitney are costing $ 180,000 for first year partners, and now so are we.

REUTERS: So it’s a decision to stay competitive in your market?

SCHUTZ: I think it’s true. That’s why everyone came up. It started in New York and made its way across the country. That’s a pretty big pay rise in the Minneapolis market. What is really behind this salary increase is the firms doing corporate work – we don’t do corporate work, we are a litigation firm. But the [local] companies that worked in corporate found their associates poached by New York businesses that didn’t care where people resided – and they paid much higher wages. If they poached someone from the company‘s department of [Faegre Drinker] for example, a Kirkland or some other large New York company might say, “We don’t care if you’re in Minneapolis, you come work for us and work remotely and we’ll pay you a lot of money.” It started the ball rolling here in the Twin Cities.

REUTERS: Do you think that money is the main motivation for young associates in their career decisions?

SCHUTZ: I think when a young partner thinks about his options, he looks at two or three things, that he weighs differently. They think about the type of business they are addressing. Do they want to litigate against a general practice? I think the second consideration is probably compensation. All businesses sell culture. All Businesses Sell: “We’re a better place to work than the next business. If you’re coming out of law school, it’s hard to tell these things apart, so you make your decision based on the type of practice at the firm and the pay.

REUTERS: You made an effort to hire former federal clerks and are now offering them a bonus of $ 100,000 to join the firm. What is the advantage of hiring clerks?

SCHUTZ: It’s two or three things. The first is that they just tend to be well accredited people. They usually come from very good law schools with rigorous academic requirements. They generally did well. They’ve usually been the subject of a review of the law or been the subject of a mock trial or things of that nature. Right off the bat, you get the best students. And then, especially at the Federal District Court level, you get someone who knows before you even get in here what a summary judgment motion is, what a dismissal motion is, what a trial looks like. . They rub shoulders with judges. They probably see things happening in the courts every day. They have a wealth of experience that they accumulate in a year or two that a first-year lawyer who joins us out of law school simply does not have.

REUTERS: How long has the Former Clerk Bonus Program been in existence?

SCHUTZ: We rolled it out in 2021. This program has been a great success for us. We’ve hired three or four here in the last six months. Just stars, all of them.

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