Recently, CNNMoney did a report on careers that they identified as "The Best Jobs In America." Number 18 on the list was "Lawyer." The report provides useful data with regard to the median and "top" lawyer salaries for "experienced" attorneys. In determining "experienced," it looks like they exclude all first year lawyers, exclude a certain percentage of years lawyers 2-7 years out, and then include all lawyer salaries for those at least 7 years out.
What's the bottom line? Click to find out.
The median salary for an experienced lawyer was $115,000. The article also identified the 90th percentile of pay as the "Top Pay" of $262,000/year.
These numbers actually mesh pretty well with the numbers newly graduated lawyers report to NALP. As we previously discussed, the average starting salary for a new lawyer that was reported to NALP was $72,000/year - although the true average may be in the range of $60,000-$70,000.
For example, if you consider that a new lawyer's salary rises about 5%/year during the first 10 years of practice, then a starting salary of $72,000 would rise to about $117,000/year in 10 years. That seems to be generally in line with reality based on the experiences of my classmates.
Also, the median salary number of $115,000 may initially seem high, but the number will be greatly reduced by taxes. Also, remember that you will be making loan payments that will be quite high - and can easily reach $3,000/month or $36,000/year. For example, using a simple tax calculator, we find that the taxes owed on the $115,000/year salary are $23,300. That knocks the take-home pay to $91,700. Toss in a $3,000/month loan repayment and your spendable take-home pay becomes $55,700/year. That's still a respectable sum, but it's not living large.
Also, recognize that even among the experienced lawyers, only 10% are making $262,000/year or more. Also recognize that taxes are starting to really hurt at this level - you would be paying about $69,000/year in taxes.
Don't forget to calculate in the money one is supposed to be putting into one's retirement account, kids college fund accounts and your savings account. That knocks the $55,700 take home pay down to probably $45,000 in actual spending money, or less than $4,000 a month with which to pay mortgage, food, utilities and other assorted expenses. Hope your spouse makes the same.
ReplyDelete1:51 - You are right! However, there is an even scarier aspect - health insurance premiums! Although most companies typically subsidize a large percentage of health insurance premiums for their employees, most law firms do NOT. For example, I pay about $800/month (about $10,000/year) for family coverage at my law firm. That makes the numbers even scarier. I will most likely do a post about health insurance costs in the future. Thanks for your comment!
ReplyDeleteFor someone making 115k, the student loan debt is huge burden. For lawyers making 60K, you may as well shoot them in the knees with a shotgun - it's crippling.
ReplyDelete2:32 - Agreed, it's crippling. The worst part is that prospective law students often don't understand the economic impact. They look around and see attorneys doing OK and figure that they will have it the same. However, today's attorneys paid much, much less for a law degree - future law students paying today's prices will have a very different life with far fewer choices.
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