In 2016, Fasken Martineau DuMoulin LLP embarked on its first firm-wide strategic review in a decade. “After that,” recalls Martin Denyes, the managing partner of the firm’s Ontario offices, “we sat down with our associates and asked for feedback.”
One complaint pervaded those conversations: it had been more than a decade since Fasken — or, for that matter, any large Bay Street firm — had made a large-scale adjustment to its associate salary grid. In other words, the associates wanted more money.
Throughout the post-recession era, firms easily parried such requests. “Since 2008, there have been more lawyers than there has been work,” says Denyes. So large firms never struggled to land and retain top talent.
But two years ago, that changed. At Fasken, the attrition rate among mid-level associates rose sharply. The strategic review uncovered the reason. Fat-walleted companies — in technology, engineering and accounting — were poaching a growing number of associates to fill non-legal roles, luring them away, in part, with higher salaries. “We learned that the pinch-point was third year,” says Denyes. “Once our people had that level of experience, there was a lot more competition in the business community for their services. This was new.”
In August 2017, Fasken revamped the salary grid at its Toronto office and the numbers soon leaked across Bay Street. The firm left compensation the same for first years (at $100,000) and sixth years (at $190,000). But it raised the salaries for second years (to $120,000), third years (to $150,000), fourth years (to $165,000) and fifth years (to $175,000).
“We figured the other large firms would match our numbers within a few days,” says Denyes. And, in the end, the Fasken pay bump set off a frenzy.
“I received a few calls that week,” recalls Frances Mahil, the director of associate and student programs at Davies Ward Phillips & Vineberg LLP. “My gut was that the Street would likely move to at least match Fasken at the third-year level.”
Davies, however, left its salary structure intact. “We’ve always been a little higher than the Street,” says Mahil, “so the bump at Fasken did not impact our levels as they were still below what we already paid.” (For example: first-year associates at Fasken earn $100,000, while the base salary for their counterparts at Davies is $130,000.)
When contacted by Precedent, most large firms declined to comment on associate compensation. But Eva Bellissimo, chair of the practice excellence committee at Cassels Brock & Blackwell LLP, confirmed in an email that her firm had also increased its associate salaries. (She declined to provide exact numbers.) “We wanted to make sure,” she wrote, “we remained more than competitive in our markets.”
When Fasken announced its raise, last summer, associates were thrilled. “I think we caught them by surprise,” says Denyes. “It went over very well.”
This story is from our Spring 2018 Issue.
Illustration by Alina Skyson