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&lt;p&gt;On Monday, BigLaw associates and hopeful law students got some welcome news: &lt;a href=&quot;/company-profiles/law/milbank,-tweed,-hadley-mccloy-llp/Why-Work-Here&quot; target=&quot;_blank&quot;&gt;Milbank&lt;/a&gt; announced it was raising its associate salaries, with first year associates now making $190,000.&#160; This is the second associate raise in the last two years after nearly a decade of stagnant pay; in June 2016 &lt;a href=&quot;/company-profiles/law/cravath,-swaine-moore-llp/Why-Work-Here&quot; target=&quot;_blank&quot;&gt;Cravath&lt;/a&gt; raised first year pay $20,000 to $180,000 a year.&lt;/p&gt;&lt;p&gt;In an interview with Vault, Milbank Chairman Scott Edelman noted that the firm decided to raise salaries because “the industry has had a good couple of years since the last raise, we’ve done quite well, and our associates have been a huge part of our success.”&lt;/p&gt;&lt;p&gt;Let’s look below the surface to fully understand the new raise.&lt;/p&gt;&lt;p&gt;&lt;strong&gt;What?&lt;/strong&gt;&lt;/p&gt;&lt;p&gt;Milbank announced raises for associates at all levels, with junior associates (first through third years) getting a $10,000 bump and midlevel and senior associates seeing a $15,000 increase. The new “Milbank Scale” is as follows:&lt;/p&gt;&lt;p&gt;&lt;img src=&quot;https://media2.vault.com/3950489/milbank_scale_500x228.jpg&quot; alt=&quot;milbank scale&quot; /&gt;&lt;/p&gt;&lt;p&gt;And while BigLaw associates will certainly take the pay raise, it’s a pretty small raise. Edelman told Vault that the pay bump “is not an outlandish one,” and he’s right. The last three first-year raises were $20,000 in 2005, $15,000 in 2007, and $20,000 in 2016, so a $10,000 raise is the smallest in absolute dollars and by far the smallest in percentage in the last 15 years.&lt;/p&gt;&lt;p&gt;&lt;strong&gt;Who?&lt;/strong&gt;&lt;/p&gt;&lt;p&gt;New York stalwart Milbank, Tweed, Hadley &amp;amp; McCloy LLP announced the raise Monday, and so far only a handful of firms have followed suit (LA boutique &lt;a href=&quot;/company-profiles/law/hueston-hennigan-llp/company-overview.aspx&quot; target=&quot;_blank&quot;&gt;Hueston Hennigan&lt;/a&gt; matched it Monday afternoon;&#160;&lt;a href=&quot;/company-profiles/law/proskauer-rose-llp/Why-Work-Here&quot; target=&quot;_blank&quot;&gt;Proskauer&lt;/a&gt;&#160;and &lt;a href=&quot;/company-profiles/law/winston-strawn-llp/company-overview.aspx&quot;&gt;Winston&lt;/a&gt; have followed suit today). It’s not completely surprising that Milbank was the first mover. The firm was one of the first to match Cravath’s pay raise in 2016, doing so within hours. More importantly, Milbank can afford to do so. The firm’s profits per partner are up 25% over the last two years, rising from $2.8 million to $3.5 million. The associate raises, while nice, amount to 4.8-6.4% bumps.&lt;/p&gt;&lt;p&gt;Of course, many more firms will match the new raises in the coming days and but will it be a BigLaw-wide pay increase like we had two years ago, or will there begin to be a bit of stratification between the $190k firms and the $180k firms? Or will a firm leapfrog Milbank and raise first year pay to $200,000? That happened in 2006, when Quinn Emanuel raised first-year salaries from $125,000 to $135,000, just to be outdone by S&amp;amp;C moving to $145,000. Given record profits in the industry over the last few years, I imagine pretty much any BigLaw firm that considers itself to be top tier will have the ability—and will feel the pressure—to match the raises pretty quickly, and a few of the very, very top of the market (&lt;a href=&quot;/company-profiles/law/wachtell-lipton-rosen-katz/Why-Work-Here&quot; target=&quot;_blank&quot;&gt;Wachtell&lt;/a&gt;, &lt;a href=&quot;/company-profiles/law/quinn-emanuel-urquhart-sullivan-llp/company-overview.aspx&quot;&gt;Quinn&lt;/a&gt;, &lt;a href=&quot;/company-profiles/law/kirkland-ellis-llp/Why-Work-Here&quot; target=&quot;_blank&quot;&gt;Kirkland&lt;/a&gt;) could certainly go over the top.&lt;/p&gt;&lt;p&gt;&lt;strong&gt;Where?&lt;/strong&gt;&lt;/p&gt;&lt;p&gt;Milbank raised associate pay for all their offices, which means not only New York but also Los Angeles and Washington, DC. Winston’s match for all its US associates means the raise reaches Chicago, San Francisco, and Silicon Valley, but also smaller markets like Charlotte, Dallas, and Houston. Will other firms follow suit and match the compensation in all markets? That didn’t really happen in 2016 (with the exception of Philadelphia, but a decade ago when firms were last making swift associate raises, they were only in the big markets at first (NY and soon after LA, DC, and the Bay area). But over the years nearly every decent-sized legal market moved up to match the New York market. So why would a new associate decide to live and work in an expensive area like New York or San Francisco when they could make the same salary in Austin or Charlotte? Associates in the larger and more expensive markets have been complaining ad nauseum in recent years in the Vault Associate Survey about the unfairness of pay being equal across markets when the hours expectations, billing rates, and costs of living vary greatly. If the raises follow 2016’s form and the new pay scale goes beyond the largest markets this year, it may keep big city associates from being fully satisfied with the raises.&lt;/p&gt;&lt;p&gt;&lt;strong&gt;When?&lt;/strong&gt;&lt;/p&gt;&lt;p&gt;Milbank’s announcement in early June matches Cravath’s timing two years ago, and as I said then, the timing is pretty crafty. Rising 2Ls are deciding right now with which firms they will interview with during the fall recruiting cycle. Milbank just made sure they were at the top of every rock star law student’s list. Edelman acknowledge this, saying the pay bump was about retaining Milbank’s associates but also about attracting top talent as laterals and entry-level attorneys. Milbank and any fast-matching firms will have an advantage this recruiting cycle over all the firms that haven’t (yet) announced the new pay scale. As for when the pay increases will kick in, Milbank has said it will be in July and has confirmed that summer associate pay will be a pro-rata match of the first year salary.&lt;/p&gt;&lt;p&gt;&lt;strong&gt;Why?&lt;/strong&gt;&lt;/p&gt;&lt;p&gt;When asked why Milbank decided to raise the pay now, Edelman noted the reasons above and also said, “we thought it was the time to do it and nobody else had stepped up. And we also like the idea of signaling to our associates that we were going to take the lead.”&lt;/p&gt;&lt;p&gt;What else could be behind the raise? Maybe the nationwide pay equality meant Milbank, with offices only in large, expensive cities, was losing out on associates who chose to work in other markets where their pay would go further. Perhaps after years of record profits per partner at Milbank (and many other top firms), the firm decided associate morale needed a boost and felt showing them a (relatively small) piece of that bounty would be make their associates happier (and maybe, more productive). Perhaps dwindling law school enrollment and a smaller entry-level associate pool—there were about a third fewer law school enrollees in 2017 (37,398) than at the peak in 2009 (51,646)—meant Milbank felt pressure to distinguish itself to bring in the top candidates. Maybe Milbank felt some firm would do it soon so they might as well attach their name to the pay hike—the market BigLaw pay scale/bonuses tend to get named after the first firm to act (&lt;em&gt;see&lt;/em&gt; the Cravath pay scale of 2016 and the Simpson pay scale of 2007).&lt;/p&gt;&lt;p&gt;For now, congratulations are in order to the slightly-better-off Milbank (and Winston, Proskauer, and Hueston &amp;amp; Hennigan) associates. Now, for those of us not on the BigLaw gravy train, we’ll just sit back, grab some popcorn, and watch all of BigLaw scramble to figure out whether they have to match Milbank (and, for some firms, whether they can), and which markets will get the raises.&lt;/p&gt;

Matt Moody

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