Editor’s note: The single most important firm story since the beginning of 2000 is the spectacular increase in associate compensation, a trend that has rocketed through the nation ever since Silicon Valley firm Gunderson Dettmer Stough Villeneuve Franklin & Hachigian decided to pay its first-year lawyers a $145,000 base salary. Gunderson has an office in Austin, Texas, guaranteeing at least some impact on the Texas market. But the phenomenon moved into Texas in a big way in late February, when Houston’s Andrews & Kurth became the first large Texas-based firm to raise its associate salary scale — a 20 percent hike effective Feb. 19. By the time Texas Lawyer held this Managing Partner Roundtable on March 6, Vinson & Elkins had also raised associate salaries, paying first-year lawyers in Texas a base plus standard year-end bonus of $115,000. While details of the new salary scales ricochet through the Texas legal community at Internet speed — a chatroom for “greedy Texas associates” helps spread the news quickly — Texas Lawyer asked the managing partners of Houston’s Andrews & Kurth, Vinson & Elkins and Bracewell & Patterson and Dallas’ Jenkens & Gilchrist to talk about the salary market and the repercussions of increasing overhead — and to shed some light on what it all means. (Since this roundtable discussion was recorded, Jenkens and Bracewell raised salaries for their associates and Andrews & Kurth boosted the lower end of its scale to meet a new, higher market.) The discussion has been edited for length and style.
Texas Lawyer: Obviously it’s a very important issue for firms — how you compensate your associates — and also it’s the big talk in the market right now. …[Let’s] get a sense of where the market is and then we can go from there onto what this means to the firms.
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