This week, Milbank, Tweed, Hadley & McCloy announced good news for its associates: they will be getting $10,000 or $15,000 raises. Starting salaries for first-year associates at the New York-based firm will now reach $190,000, even higher than the $180,000 starting pay announced by Cravath Swaine & Moore in 2016, which set a new high bar for the industry at the time.

But that news isn't as sweet for lawyers on the other side of the table. In-house leaders have long expressed concerns over firms' growing legal fees, with many turning to alternative service providers or moving work in-house to cut costs. In the past, firms have met competitors' associate increases, a cost that, at the end of the day, gets passed on to clients. So far, Winston & Strawn, Simpson Thacher & Bartlett and Proskauer Rose have said they will match Milbank's new pay scale, and more firms may follow.

Corporate Counsel reached out to a number of in-house leaders following Mibank's announcement to gauge their reactions. Many opted to remain anonymous, but all displayed strong feelings about this development. Here are their responses, some of which have been lightly edited for clarity and length.

Mark Smolik, general counsel and chief compliance officer at DHL Supply Chain Americas:

“In the open market, there is little difference between a company raising prices for its goods or services and a law firm increasing compensation for its people. It is a cost of doing business. Those costs are typically passed along to customers in the form of higher prices or billing rates. It's up to the purchaser of those goods or services to evaluate whether the prices charged are commensurate with the value delivered. If a law firm feels it necessary to pay first-year attorneys an extraordinary $190,000 to remain competitive, then that is their decision. Just don't ask for me to pay for it.”

A legal operations director:

“… I find it unfathomable that not just one but many law firms believe that a first-year associate coming out of law school would command such a high starting salary.

The tone deafness is astounding. We as purchaser of legal services keep asking our firms to bill based on value because that is what we want to buy, not hours. They respond by raising rates across the board. It is no wonder that the largest-growing segment in the legal industry over the past few years has been the role of in-house counsel. You can keep living in your 'reality distortion field' and pay a first year associates $190,000. You certainly will attract lawyers to come work for you but we are firing you everyday, you're just too busy playing #metoo to notice.”

A legal team executive from a major company:

“This sort of change is a continued example of the compounding costs of the traditional law firm model. I can readily source through alternative legal service providers equally competent lawyers who have excellent credentials, 10+ years of experience, and will work better, faster and with more know-how and practicality than any junior associate for less than the cost of an associate at these salary rates.”

A law department operations professional:

“It is not surprising that a firm raises the bar on first-year compensation to attract the best and brightest J.D.s from top schools. Law firms often compete for the top-quality graduates from the top law schools so it follows that other firms will at least match Milbank's offer as Milbank did after Cravath raised the bar on the Class of 2015 first-years to $180K. Unfortunately, this practice also raises the costs for law firms. Corporate law departments typically refuse to pay for first-year associates because often these new recruits have no experience and time spent on matters essentially amounts to training.  However, the costs for the firms rise and you can bet the firms are seeking to recover these increased costs through higher rates. It would be wise for firms to message to the market how they intend to fund these increased costs and potentially balance this message with innovation that is occurring at the firms aimed at reducing costs and creating efficiencies.

If Milbank were one of our firms, I would proactively congratulate them on their strategy to attract top talent and ask for their strategy to fund their talent acquisition with commentary about keeping rates flat this year.

However, if you think about $190K salary versus the last increase to $180K in 2016. It's roughly a $10K difference or 5 percent in two years.  I'm not sure that is a crazy increase. The shocking part of this message is that first-years typically have no experience and their base salaries are extremely high.”