Redwood Analytics

When I heard last night that casting is going on for Philadelphia's version of the Real Housewives series, "The Women of Rittenhouse Square," as a Philly resident, I thought to myself, "Do we have to repeat everything that is done in New York and North Jersey?"

From a purely economic perspective, better news was delivered today on the Law.com newswire in a summary from the New Jersey Law Journal on the NALP's annual salary survey.  In line with the economic pressure on law firms, Philadelphia firms, along with firms nationwide, are expected to drop starting salaries for new associates.

Only the New York megafirms seem to be holding to high salaries. Two years ago, New York starting pay crested to $160,000, fomenting a wave of increases in other major cities. The N.Y. median salary will stay at $160,000 this fall but the figure "may not be sustained in many markets," the survey says.

On the other hand, large Philadelphia firms are following the national trend, with a projected $130,000 median base salary this fall that is $10,000 less than the current $140,000.

The Philadelphia downturn will affect southern New Jersey, where many of these firms have sizable branches. Blank Rome, with an office in Princeton, N.J., announced in June it would shrink starting salaries from $145,000 to $130,000 this fall. Schnader Harrison Segal & Lewis (Cherry Hill, N.J.) will reduce first-year pay from $135,000 to $125,000; Montgomery McCracken Walker & Rhoads (Cherry Hill and Linwood, N.J.) from $135,000 to $105,000; Drinker Biddle & Reath (Princeton and Florham Park, N.J.) from $145,000 to $105,000.

The northern New Jersey market seems to be aligned with New York, with a median fall salary of $136,000, which is $4,000 higher than last year. Those data were derived from seven unnamed law offices in Morristown, Newark, Roseland and Westfield.

As we've stated here before, costs are high for new associates and revenue is low, because their work is often discounted at the time of billing, or written off completely.  The move to lowering starting salaries, while uncomfortable for recent law school graduates, should position these firms for greater profitability down the road by building a pipeline of young talent and cutting some costs. 

Philly may be getting "Real Housewives" but they're bucking the NY/NJ trend in associate salaries.