New research indicates a stark disparity in earnings within the profession. According to a report by Georgetown University’s Center on Education and Workforce (CEW), the median annual salary for law graduates is approximately $72K after debt repayments, but this figure varies significantly based on factors such as the type of law practiced, geographic location, and the ranking of the law school attended.

The CEW  report, titled “A Law Degree Is No Sure Thing: Some Law School Graduates Earn Top Dollar, but Many Do Not” provides a comprehensive analysis of the return on investment (ROI) for law degrees, using data on employment, demographics, salaries, bar passage rates and debt from multiple sources, including the U.S. Census Bureau, the American Bar Association, and the National Association for Law Placement. The findings show that while some law graduates achieve substantial financial success, others struggle with earnings that scarcely justify the substantial debt incurred during their studies.

The Financial Landscape for Law Graduates

The Georgetown report highlights the median salary of $72K is just a midpoint, with the top 25% of earners making significantly more. Graduates from highly prestigious institutions and those entering lucrative fields such as corporate law can command starting salaries well into six figures. For instance, graduates from top-tier law schools like Harvard and Stanford often begin their careers with salaries exceeding $180K, especially if they secure positions at major law firms in urban centers like New York City or Los Angeles.

Conversely, those who attend lower-ranked law schools or choose to work in less lucrative areas of law, such as public interest or legal aid, often see starting salaries in the $50K to $60K range. This pay gap can be particularly burdensome given the average law school debt, which the American Bar Association estimates to be around $130K.

Debt and Its Impact

The financial strain of law school debt is a critical issue highlighted in the report. For many graduates, high debt levels coupled with modest salaries make it challenging to achieve financial stability. The CEW study notes that while some graduates quickly move into high-paying roles, others face a prolonged period of financial struggle. The disparity is further compounded by the varying costs of living across different regions, making debt repayment more burdensome for those in high-cost areas.

The report also points out the ROI for a law degree can be significantly negative for some graduates, especially those who do not pass the bar exam or who end up in low-paying jobs. This reality underscores the importance of prospective law students carefully considering their career goals and the financial implications of their education choices. The report found that the following schools offer the highest ROI to graduates four years into their careers:

1. Columbia Law School - median net earnings of $253,800 after median monthly debt payments of $2,300

2. University of Pennsylvania Carey Law School - median net earnings of $238,000 after median monthly debt payments of $2,000

3. University of Chicago Law School - median net earnings of $230,700 after median monthly debt payments of $2,100

4. Cornell Law School - median net earnings of $227,100 after median monthly debt payments of $1,800

5. Stanford Law School - median net earnings of $227,100 after median monthly debt payments of $1,700

6. Harvard Law School - median net earnings of $220,900 after median monthly debt payments of $1,100

7. Northwestern University Pritzker School of Law - median net earnings of $206,700 after median monthly debt payments of $1,800

8. University of Virginia School of Law - median net earnings of $197,200 after median monthly debt payments of $2,000

9. Duke University School of Law - median net earnings of $193,200 after median monthly debt payments of $1,800

10. Yale Law School - median net earnings of $185,400 after median monthly debt payments of $1,600

Most of these schools are part of the top 14 in U.S. News & World Report’s law school rankings. And all but Stanford sent more than half of their 2023 Juris Doctor graduates into jobs at firms with 251 or more lawyers. 

At the other end of the spectrum, graduates of 33 institutions earn less than $55K net of debt. Those schools, which include Cooley Law School; Atlanta’s John Marshall Law School; and Faulkner University Thomas Goode Jones School of Law, are clustered near the bottom of the U.S. News rankings.

Factors Influencing Earnings

Several factors contribute to the wide range of earnings among law graduates. The type of employer is a significant determinant, with positions in large law firms typically offering the highest salaries. 

Geographic location also plays a crucial role. Law graduates working in major metropolitan areas tend to earn more than their counterparts in smaller cities or rural areas, although this is often offset by higher living costs. 

The practice area is another key factor. Specializations in corporate law, intellectual property, and financial services tend to be more lucrative than fields like family law or criminal defense. The Georgetown University report illustrates that while some graduates secure positions in high-paying sectors, many others enter fields with lower financial rewards but potentially higher personal fulfillment.

Implications for Prospective Students

The Georgetown University report findings paint a complex picture of the financial outcomes for law graduates. While the potential for high earnings exists, the reality is that many graduates face significant financial challenges, especially in the early stages of their careers. The vast disparity in earnings highlights the need for careful consideration and planning by those entering the legal profession.

Elite Lawyers at Top Firms Experiencing Unprecedented Pay Increases

In a remarkable shift, elite lawyers at top law firms are experiencing unprecedented pay increases, with some lawyers seeing their compensation packages triple, a New York Times report reveals. This surge in salaries reflects the intense competition for top legal talent and the growing demand for specialized expertise in a complex financial landscape.

The report shows ‘hotshot’ Wall Street lawyers are now in such demand that there are bidding wars between firms for their services, similar to sports teams’ approach to signing star athletes. 

The Surge in Salaries

The report reveals the extent of these pay increases at prestigious firms such as Kirkland & Ellis; Simpson Thacher & Bartlett; Davis Polk; Latham & Watkins; and Paul, Weiss, Rifkind, Wharton & Garrison. 

These firms, known for their elite status and high-profile clientele, have significantly boosted their pay scales to attract and retain the best legal minds. Senior associates and Partners at these firms are now earning salaries that were once reserved for only the highest-ranking Partners. According to one Partner at a law firm, pay for top lawyers has roughly tripled in the past five years.

“$20 million is the new $10 million,” said Sabina Lippman, a Partner and Co-founder of Lippman Jungers. In the past few years, at least 10 law firms have spent  around $20M a year or more to lure the highest-profile lawyers.

According to the report, the one thing many of these new heavy hitters have in common is that private equity giants are on their client roster and the main driving force behind the substantial pay hikes.

“Lawyers with close ties to private equity increasingly enjoy pay and prestige similar to those of star lawyers who represent America’s blue-chip companies and advise them on high-profile mergers, takeover battles and litigation,” the report reads.

Kirkland & Ellis in the Lead

The 115-year-old, Chicago-based law firm is at the forefront of this salary surge, with six Partners in the firm – some of them freshly recruited, earning at least $25M in 2023. Several other Partners in the firm’s London office earned around $20M.  

Kirkland, which reported a gross revenue of $7.2B last year and topped the 2024 Am Law 100 revenue ranking, was one of the first law firms to recognize the big earning potential of private equity clients. Roughly a decade ago, the firm began poaching heavy hitters at rival law firms who had experience and longstanding relationships with some of the biggest private equity groups.

Factors Driving the Increase

Besides the backing of private equity clients , several factors are driving this escalation in legal salaries. One of the primary reasons is the fierce competition among top law firms to secure and retain premier legal talent. 

As financial markets become more complex and globalized, the demand for lawyers who can navigate these intricacies has skyrocketed. Firms are willing to pay a premium for lawyers who can deliver exceptional results and maintain their competitive edge.

Moreover, the legal industry is experiencing a surge in high-stakes transactions and corporate deals. The boom in mergers and acquisitions, spurred by favorable economic conditions and technological advancements, has created fertile ground for legal experts who can manage these large, intricate deals. Firms are also expanding their services in areas such as cybersecurity, regulatory compliance, and intellectual property, further driving the need for top-tier legal talent.

The Impact on Law Firms

This trend is reshaping the financial dynamics of top law firms. To support these substantial salary increases, firms are adjusting their billing rates and focusing on high-margin work. The pressure to maintain profitability while offering competitive compensation is pushing firms to be more strategic in their client engagements and service offerings. Critics worry that the higher pay has gotten out of hand and if the trend continues, it could put unnecessary strain on law firms forced to stretch their budgets for talent retention.

The increase in lawyer salaries is also influencing the firms' culture and operations. Firms are placing a greater emphasis on performance metrics and business development skills, encouraging lawyers to excel not only in their legal expertise but also to contribute to the firm's growth and profitability. This shift is leading to a more entrepreneurial approach within law firms, where lawyers are expected to play a pivotal role in attracting and retaining clients.

“Law firms have gotten a lot more commercial in how they run themselves,” said Neil Barr, the Chair and Managing Partner of Davis Polk. “Firms are operating like businesses rather than old-school partnerships, and it’s led to more rational business behavior.”

Impact on the Broader Legal Market

The substantial pay increases at elite firms are having a ripple effect throughout the legal industry. Mid-tier and smaller firms are finding it challenging to compete with the financial packages offered by Wall Street giants, leading to a potential talent drain. This disparity is prompting some smaller firms to explore niche markets and specialized practice areas where they can offer competitive advantages beyond salary alone.

Additionally, the rising salaries are raising questions about the sustainability of such compensation levels. While top firms have the financial resources to support these increases, there is concern about the long-term impact on the profession. Some legal experts worry that the focus on high salaries could overshadow other important aspects of the legal profession, such as pro bono work and access to justice.

Moreover, lawyers at these elite firms often face demanding workloads and long hours, which can take a toll on their work-life balance and overall well-being. The high salaries, while attractive, come with a cost that not all lawyers are willing to pay.

“Law firms want people who are going to be motivated based on culture,” Lippman said. “But at some point if you have this big difference between firms, everyone has a price.”

As the legal industry continues to adapt to new challenges and opportunities, the impact of these salary increases will be closely watched by firms, lawyers, and clients alike. The balance between attracting top talent and maintaining a healthy, sustainable profession will be a key focus for the legal community in the years to come.