From Manhattan to Minneapolis, ripples spread from Big Law raises

September 16, 2021 Editor Ripple 0

  • Robins Kaplan is boosting starting associate pay from $140,000 to $180,000
  • The rise of remote work has Midwest firms competing more directly with New York salaries

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(Reuters) – When New York firms in June began raising starting associate salaries as high as $205,000, leaders at Minneapolis-based litigation firm Robins Kaplan figured it was just a matter of time before they felt the pay pressure.

Sure enough, local competitors including Faegre Drinker Biddle & Reath and Dorsey & Whitney increased associate pay in order to compete nationally for associate talent. Robins Kaplan, which has about 250 attorneys, will follow suit on Oct. 1 and bump up first-year associate pay from $140,000 to $180,000 to keep pace.

Ronald Schutz, chairman of Robins Kaplan’s executive board, spoke with Reuters this week about that salary increase, what associates want in a law firm, and why the firm has placed a premium on hiring former federal clerks.

The conversation below has been edited for clarity and length.

REUTERS: Why increase salaries now?

SCHUTZ: We have always matched the bulk of the firms that are here in town with first-year salaries. The prevailing 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 large firms in town—Faegre and Dorsey & Whitney are $180,000 for first-year associates, and now so are we.

REUTERS: So this is a move to stay competitive in your market?

SCHUTZ: I think that’s true. That’s why everybody moved up. This started in New York and has worked its way across the country. It’s a pretty big salary jump in the Minneapolis market. What’s really driving this salary bump are the firms that do corporate work—we do no corporate work, we’re a litigation firm. But the [local] firms that do corporate work were finding their associates being poached by New York firms that didn’t care where people resided—and they were paying much higher salaries. If they poached someone from the corporate department of [Faegre Drinker] for example, a Kirkland or other big New York firm could say, “We don’t care if you’re in Minneapolis, you come work for us and work remotely and we’ll pay you a bunch of money.” That started the ball rolling here in the Twin Cities.

REUTERS: Do you think money is the primary motivator for young associates in their career decisions?

SCHUTZ: I think that when a young associate is considering their options, that they look at two or three things, which they weigh differently. They consider what type of firm they are going to. Do they want to do litigation versus a general practice? I think the second consideration is probably compensation. All firms sell culture. All firms sell, “We’re a better place to work than the next firm.” If you’re coming out of law school, it’s hard to differentiate those things so you make your decision based on what kind of practice the firm has and compensation.

REUTERS: You’ve made a push to hire former federal clerks, and now offer them a $100,000 bonus to join the firm. What’s the benefit of hiring clerks?

SCHUTZ: It’s a couple of things. One is that they just tend to be well-credentialed people. They generally come from really good law schools with rigorous academic requirements. They’ve generally done well. They’ve usually been on law review or done moot court or things of that nature. Right off the bat you are getting top students. And then—especially at the federal district court level—you are getting someone who knows even before they set foot in here what a summary judgment motion is, what a motion to dismiss is, what a trial looks like. They’re rubbing shoulders with the judges. They are probably seeing things happen in court every day. They’ve got a wealth of experience that they accumulate over one or two years that a first-year lawyer joining us out of law school just doesn’t have.

REUTERS: How long has the former clerk bonus program been around?

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

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