Does Money Buy Happiness in BigLaw?
Published: Feb 18, 2015
Things are looking up for the future of associate compensation following the 2014 bonus announcements, which started with Simpson Thacher raising the bar from past years and continued with most big firms following suit. (Or in the case of Davis Polk, upping Simpson’s ante and setting the bar even higher). This is good news in the sense that associates can really feel rewarded for putting in 2000+ billables per year. For the first time since the recession many attorneys can make major dents in their student debt with one year’s payout. But how does higher pay impact associate satisfaction? If you make more money, are you more likely to report overall job satisfaction?
I checked out the results from Vault’s 2014 associate survey to find out (PLUG: the 2015 survey is currently in progress, so look out for an email from your firm’s recruiting manager if you haven’t received one already!). As it turns out, there is some correlation between associates’ satisfaction with their compensation and with their jobs overall. We asked associates to rate their overall job satisfaction on a scale of 1 to 10, with 1 being “Completely unsatisfied” to 10 being “Entirely fulfilled.” We also asked associates to rate their compensation on a scale of 1 to 10, with 1 being “Inadequate” to 10 being “Extremely generous.” Associates who were the most satisfied with their pay—those who scored their compensation 8, 9 or 10—tended to be happy at work, too; their average satisfaction rating was 8.24 and their average base salary was $194,472. On the other hand, associates who rated their compensation 1, 2, 3 or 4 reported an average satisfaction rating of 5.46. Their average base salary was $178,429.
It makes sense that generally, lawyers who are happy with their pay are more likely to report high levels of overall job satisfaction. Presumably associates do consider their paycheck when they consider their job fulfillment more broadly. Yet when we broke this data out by associate level there were some differences, as the chart below indicates. Most firms with high compensation scores among junior associates also earned high ratings among junior associates for overall satisfaction, whereas satisfaction with compensation was less of a predictor of overall job satisfaction among mid-level attorneys. But then in the senior years, overall satisfaction climbed back up again, while satisfaction with compensation continued to sink lower... and lower.
These differences between junior, mid-level and senior attorneys suggest that in the earlier years, a higher level of happiness with pay will likely contribute to overall job satisfaction. But in the fourth, fifth and sixth years, the feeling of being well-compensated is less likely to steer associates towards fulfillment on a larger scale. It’s the old “money doesn’t buy happiness” adage; sure, the increased cash flow is nice, especially when you’ve been living on a student budget for three years of law school. It’s the BigLaw honeymoon phase. But there are only so many 2,000+ hour years a person can take before they start to realize that no amount of money can make you like a job that otherwise sucks the life out of you.
But what about the increase in overall satisfaction among senior associates, who at this point are feeling less well-compensated than ever? At least they are happier. They are likely more confident in their capabilities and performing more interesting, high-level work. And let’s get real—anyone who lasts at a firm that long has to have a certain level of tolerance… at that point, many of those who were disgruntled as mid-levels have moved on to other places. So we end up with a smaller pool of "survival of the fittest" senior associates who are generally satisfied with where they are in their careers, but who are becoming increasingly dissatisfied with their pay. With senior associates at many firms raking in $100,000 with this year’s new market bonus rate, I expect this data to look a lot different after the results of Vault’s 2015 Associate Survey are in.
Be Thankful: BigLaw Bonuses to Increase for 2014
Will Law Firms Increase Salaries in 2015?
The Best Law Firms for Compensation
The Best Law Firms for Satisfaction
Recovery means bigger bonuses at law firms (Crain’s)
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