What Is Big Law?
Big Law refers to the largest law firms in terms of general revenue that have significant influence in the legal industry. They are typically located across major cities in their respective countries and also have offices in other parts of the world. A large firm can be very easily identified by their size and their multiple branch offices across different cities and countries. Typically, these form are characterized by their high revenues and number of attorneys which evoke awe. Their influence and revenue puts them in a position where they are deemed to be more powerful than the in-house departments of large companies.
To be classified as a "Big Law" firm, a firm must have an annual revenue of $1,000,000,000 which is typically distributed across a large many offices worldwide. Of course, there are various other firm classifications which might seem confusing at first glance. The globe’s 100 largest firms are commonly referred to as "White Shoe" firms . The second group are referred to as "National" firms which have a mid-300 to 400 attorney count. Thirdly, there is the "Large" group which comprises of firms that have 100 – 200 attorneys. Lastly, there are firms which fall in the "regional" group. Their size is considered large and their revenue is estimated to be between $50 to $100 million.
Big Law firms have started to become prominent in emerging economies around the world. China has certainly followed in the US footsteps and their expansion strategy has become aggressive. Among their most popular routes are New York City and Hong Kong. Expansion in Hong Kong offers the most solid platform as it is a booming economy. Which is precisely why ‘Merger Monday’ is a thing among them where Big Law firms combine their resources with smaller firms to coerce into one.
The Top 5 Big Law firms in America are ranked as follows:
Kirkland & Ellis;
Latham & Watkins;
Skadden, Arps, Slate, Meagher & Flom;
Hogan Lovells; and
Clifford Chance.
Average Salary Range for Big Law Paralegals
The average salary range for paralegals in Big Law usually falls between $90,000 and $135,000.00. Junior paralegals might earn as low as $75,000.00. Keep in mind, this is just the base salary. Overtime pay is often near double the standard rate of pay in Big Law. Your location in the US makes a big difference in how high your compensation package will be. Paralegals living in New York City or the San Francisco area will earn the most.
Location also plays an important role in paralegal earnings in Big Law. There is a 12.0% pay differential for paralegals in New York City and a 10.7% pay differential in the San Francisco region. While there is no pay differential in Washington, D.C. paralegals still earn about 9.1% more than their average counterparts nationwide. Chicago, Houston, and Dallas, TX are also cities that compensate law firm workers fairly. Midwest paralegals are compensated 6.3% more than the national average.
Several other factors affect the paralegal who is employed in Big Law. With experience, paralegals in these firms will continue to earn more. One to three years of experience is a great starting point for entry-level paralegals. The best paid experience ranges fall in the categories of four to six years of experience and then five to ten years of experience. Nationally, the rate of compensation for paralegals who have four to six years of experience is around 21.1%. For those with five to ten years of experience, the compensation rate is 22.6% more compared to the national average. Only 1.7% of those employed have the latter amount of experience which reflects the higher salaries in this group.
Paralegals will also earn more if they work full-time (34.2% more) and have a bachelor’s degree (31.6%) than those who do not have these unknowns.
Big Law Paralegal Salaries vs. the Rest of the Legal Field
In order to make sense of just how lucrative a career in Big Law can be, it’s important to know how their compensation packages compare to other law firms and corporations. While Big Law salary figures are easily available—thanks in large part to the "Associate Salary Survey" conducted by Above the Law—that doesn’t mean the same can be said for paralegal compensation. Most sources available to paralegal professionals focus on the paralegal jobs themselves, not the salaries associated with said jobs.
This section provides such data. While for the most part this will be a comparison of what paralegals in smaller law firms or in the public sector can make in terms of compensation, there may be outliers that may not always be 100% accurate when accounting for all factors. In other words: this is a rough guideline but there may be exceptions to the data provided.
Paralegals at large law firms, for the most part, tend to earn well into the six figures as a result of billing more work than non-Big Law paralegals, more chances for overtime, and overall more prestigious "Big Law" names to go along with those highly compensated credentials. In that regard, they’re quite comparable to "Big Four" accountants and even paralegals at CPA firms, as so much of an accounting professional’s salary comes down to billable hours and work done, with publicly listed data on fees charged making it much easier to find averages. Here are some numbers to show how a Big Law paralegal salary compares to one at a smaller firm or financial services:
It takes about 1000 billable client hours to equal 1 year of pay (in terms of annual salary) for a typical paralegal; everything they do above that is overtime. If you were to compare that to paralegals at medium-sized law firms, whose average salaries were about $66,454 according to PayScale, that’s a difference of about $49,000 annually. For the $115,454 salary number, that’s the median reported by the Bureau of Labor Statistics. Most of those jobs are with non-profit organizations or the government, which likely don’t have the high salaries of not just private firms but especially of Big Law paralegals. Comparing that to the Big Law paralegal number of $100,000, that would be savings of about $69,682 annually, and $179,682 annually used for overtime.
Considering how long it can take to rank up at Big Law firms, that adds up to a lot of money. However, this isn’t necessarily a big money choice to be made here. There is no guaranteed lump sum that will only go to paralegals at a non-Big Law firm, and you might find a much better working environment that makes you more productive when you can put in 60 or more hours a week as a paralegal than in a lower-paying or same-paying job elsewhere. A Big Law paralegal is expected to be productive with big time, they can’t coast on their salary. That’s not to say that smaller firms and corporations won’t be much more understanding in regards to paralegal hours, however, and this number can be a factor.
Paralegal Salaries in Big Law: What Factors Come into Play?
Apart from education and experience, several factors affect paralegal salaries in big law: geographic location, type of law specialty, the size of the firm and its economic health. Currently, coastal cities such as New York, San Francisco, San Jose and Washington D.C. pay the highest average salaries for paralegals in the United States, but major urban centers such as Atlanta, Chicago or Houston are also strong regional players for paralegal employment. This leads us to consider that the geographic areas with the higher costs of living provide the means for employers or law firms to compensate their employees with better salaries.
It is no surprise that there are wide ranges of salaries that correspond with different specialty areas of practice. For example, the Securities and Commodities law paralegals, whose clients are generally large financial institutions, earn much more than a paralegal who specializes in Litigation and Personal Injury. As typically seen in any industry, the employees who bring in the most money always tend to earn the highest salaries. Litigation and Personal Injury paralegals earn the lowest salaries in big law, with the exception of those who are personal injury case managers that have additional advanced education, training and experience.
Big law firms have one of the highest concentrations of paralegals, other than e-discovery firms which mainly hire lawyers. The salaries for these paralegals are generally higher than that for paralegals who are considered in-house staff or work in small- to medium-sized law firms. In-house staff paralegals generally earn salaries that are in-line with general office administrative staff. Paralegals are generally hired by large law firms from local and national paralegal schools and programs, state and local paralegal associations and trade shows. The number of paralegals employed, as well as the number of paralegals generally found in a law firm, is dependent upon the size of the firm and its practice type. Firms who specialize in corporate law or financial services will generally have more paralegals than firms that specialize in Criminal Defense or Family Law, where the paralegals work in a more administrative capacity. Paralegals are employed in a variety of practice areas including, but not limited to: Litigation; Intellectual Property; Labor or Employment; Tax; Corporate, Mergers & Acquisitions; Health Care; Real Estate; Patent; Banking; and Family Law.
How Much Can You Advance at Big Law and How Quickly?
The career trajectory for paralegals at Big Law firms can be different than at other law firms or in other industries. Paralegals who stay with their firms are often able to move up the ranks, with salary increases commensurate with promotions. For example, paralegals who work hard, show initiative, and demonstrate excellence in their work product may be offered the opportunity to serve in supervisory roles over additional paralegals and staff of the same or lower rank, such as paralegal assistants or secretaries. Recruiters for Big Law firms have reported seeing paralegals who went from earning $50,000 to $70,000 to $100,000 simply by taking on supervisory responsibilities over larger groups of non-attorney staff. These promotions can provide paralegals with valuable management experience and add to their skills and credentials when they apply for paralegal jobs outside the firm or laterally to another firm.
Paralegals at Big Law may also be promoted to senior paralegal positions. This path is more common among paralegals without supervisory responsibilities who want to develop their expertise in a specific practice area, such as patent law or litigation. For these paralegals, because of the time and effort required to develop these kinds of specialized skills, supervisors may not offer this option until they have been the firm’s employee for a number of years. Big Law firms promote these paralegals to senior paralegal status partly because they believe that it helps retain talented and ambitious paralegals who might otherwise choose to leave because of a lack of upward mobility. In addition to being an incentive to stay with a firm, this promotion can help persuade paralegals to stop considering transfers to other firms or to other in-house legal departments. Senior paralegals in the same practice area as the supervisor whose recommendation they obtained may also be promoted to assist them in mentoring the new paralegals in their practice groups.
Sometimes, paralegals may earn promotions simply because of the nature of their firms’ hierarchies . Some of the largest firms have so many tiers of staff that there are paralegals at every level, regardless of experience. One recruiting firm reported that some Big Law firms have five levels of paralegal staff, with their most senior paralegals earning between $135,000 and $145,000 a year and supervising more than 50 people. These firms also have other staff above senior paralegals and below junior lawyer levels, providing a potential path for paralegals who could see their way clear to the levels above and below.
In addition to supervisory and senior paralegal positions, many Big Law firms also have additional or alternative management tracks for paralegals. For instance, one popular ascension to a management position is through a firm’s Knowledge Management department. The leaders of KM departments decide whether paralegals with a particular practice area should move into KM positions to help develop systems for tracking the relevant documents, filings, and other information accessible to partners and associates. When paralegals with practice-specific knowledge move to these positions, it can benefit both the paralegals in terms of salaries and the firm in terms of practice area efficiency.
Dependent on the structure of individual Big Law firms and their staffing needs, paralegals may have opportunities to move into non-paralegal positions within their firms, such as marketing, IT, or administration. Whereas the turnover in non-paralegal roles at Big Law tends to be more frequent, for those paralegals who do transition, the salary increases can be substantial. Big Law firms may advertise their employment packages to recruit paralegals with large salaries and generous benefits, but the biggest per-attorney expense of all is the compensation of their top management and other business roles. This means that the paralegals who move to other positions may see their salaries increase significantly as they take on additional responsibilities in those roles.
Salary and Benefits Beyond the Paycheck of a Big Law Paralegal
Emphasizing the total compensation package is essential to recruiters, paralegals, and potential Big Law investors, so it’s no surprise that these firms pay competitive benefits as well. After all, $65,000 is offset by employer-provided subsidized health insurance, a top notch 401K plan, a generous PTO policy, and substantial continuing education reimbursement for improving skills or acquiring new ones. As with any job, the extra compensation is a major talking point with the potential for significant real world impact. For example, Big Law paralegals tend to receive health insurance with a small percentage of their premium payments covered by the employer. Large law firms are expected to have business group plans that equal or outshine private industry options. 401K contributions are also popular. In many cases, this is a way of offsetting gains from the high salaries said to be nearing six figures. While 401K plans aren’t mandatory, those established by employers can reduce what paralegals owe in taxes on their income— so the IRS makes it a win/win for business owners and their employees. Additionally, paid time off policies may be some of the best in the industry. Many small and mid-sized firms provide some PTO, but few offer the three week minimum seen with large law firms. Vacation, sick time, and floating holidays are often discussed immediately (if not emphasized) with employees.
Negotiating Your Big Law Salary
Your salary should be based on your current skills and years of experience. For example, if your B.A. Degree was obtained 10 plus years ago, your current salary level should match with your higher level of experience. All of this information is attainable and researchable if you know where to look. Our favorite web site for researching salary levels and ranges is http://www.salary.com. A more advance web site is http://www.bls.gov, The U.S. Bureau of Labor Statistics. You can easily obtain data for any job position; they regularly update their information once a year. Most agencies should have an active skillset list that allows you to familiarize yourself with the current general salary ranges of available positions. If you are already employed and negotiate your salary, that is not always embraced well and can be an uncomfortable situation. For those individuals just starting out or recently graduated, your salary offer should fall within the above ranges. Be specific. Do not settle for the first offer. Identify what your needs are and be clear. If the employer does not come up to the range you need , be ready to counter-offer and make them an offer you believe is "reasonable" and that works for you. Be patient at first, do not "bite the hand" that feeds you if you have not been an employee for very long, give it some time first. If a vendor or agency offers you an hourly rate of 35.00 in my opinion that is a very low start rate unless you are working temporary positions or entry level positions. Again, compare your skills and years of experience. If you have been offered 35.00 per hour and you are filling a standard schedule of 40 hours per week, your current weekly earnings would be 1,400 plus any additional overtime hours. Your monthly earnings would then amount to 5,600. Ask yourself if that really is a fair amount of money for your level of education and acquired skill set? This is the perspective you should be viewing your salary through. This is not intended to put anyone down, but are you really worth that much money? The point to be made is we must look at ourselves and be honest. If your skills are truly worth 35.00 an hour then you are an exceptional paralegal.