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Monday, December 4, 2017

Survey Shows Rising Compensation for Los Angeles/Orange County Law Firms


Survey Shows Rising Compensation for Los Angeles/Orange County Law Firms

In a fiercely competitive market for talent, it’s critical for law firms to compare their compensation plans with those of their peers. Our annual Law Firm Compensation, Billing Rates, and Benefits Survey provides unique insights into compensation trends in Los Angeles and Orange County. This year, we’ve also expanded the survey to new geographic areas, including San Diego, the San Francisco Bay Area, Seattle/Puget Sound, Nevada and Boise.

This year saw bigger paychecks for some positions, as well as some big gender gaps. Here’s a quick look at some of the high-level findings on compensation from the 2017 survey of 144 firms (totaling nearly 10,000 people) in the Los Angeles/Orange County area.

Higher compensation...for some

Amidst signs that the law firm marketplace is stabilizing, compensation increased for certain job roles in 2017:
  • Equity partners: Our survey shows a 7 percent increase in average equity partner compensation, which has climbed roughly $90,000 over the past three years to $635,538.
  • First-year associates: The average base compensation for first-year associates saw a 6 percent increase this year.
  • Chief marketing officers (CMOs): The CMO position has experienced a 25 percent increase in the past two years.
  • Human resources (HR): A more modest increase of 5 percent was reported by HR roles in 2017.
  • On the other hand, compensation for executive directors saw a slight decline in 2017 (2 percent) and is roughly $50,000 less than the 2013 level. Chief information officers (CIOs) saw compensation decrease 10 percent from 2016 to 2017.
Compensation for chief financial officers (CFOs) has remained essentially flat; likewise for controllers. Overall, associates also have seen virtually no change in compensation levels in the past few years.

What a gender gap

While the gender gap is practically nonexistent at the associate level, with men receiving 1.7 percent more in compensation than women, that’s definitely not the case for partners. The average gender gap at the equity partner level has male partners receiving 28 percent more in total compensation than females—$639,943 for men compared to $485,110 for women. That gap widens to a staggering 41 percent difference within the 90th percentile of firms.

Net income per partner tops $1 million

This year marked the first time in decades that average net income per partner topped the million-dollar mark. Based on this year’s compensation findings, most of the increased income appears to be staying at the partner level.

Bay Area compensation is higher

A comparison of the LA/Orange County results with our new survey of firms in the San Francisco Bay Area indicates that compensation is higher in the north. First-year associates working in the Bay Area received 15 percent more, on average, for base compensation than their counterparts in Southern California. Equity partners in the Bay Area also received more in actual dollar amounts than those in Southern California.

Get more details

You can learn more about compensation for nearly 100 positions—partners, attorneys, executive directors, paralegals, legal secretaries, administrators, CFOs and more—in the full report. It details competitive compensation, billing rates, hours and staff ratios across many demographic segments, including practice areas, locations, firm sizes and positions.

To get the Los Angeles/Orange County report or learn about the results for San Diego, the San Francisco Bay Area, Seattle/Puget Sound, Nevada or Boise, contact Crystal Lee at crystal.lee@armaninollp.com.

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