Associate Salary Hike to $180K Cited as Strain to Law Firm Profits

This July, Cravath Swaine & Moore hiked its starting salary for first year associates by 11 percent to $180,000, reigniting a battle between law firms to offer competitive associate pay in a way that hadn’t existed since 2007.

In the months that followed, law firms across the country raised their associate compensation scale to match Cravath — and now those pay increases, which affected associates across the board, are showing up as profit growth slows at some law firms, according to a new report on the first three quarters of 2016 compiled by Citi Private Bank.

“This is the first quarter we have an opportunity ...