Defections to the dot com world are to blame for the huge salary increases being given to law firm associates in New York and California. Faced with the prospect of losing their best and brightest to Internet start-up companies, top law firms recently announced pay boosts of as much as 50% to associates. Starting associates now make as much as $160,000 per year. With the "ripple" adjustments that now need to be made to other lawyers, experts predict that payrolls at top firms will jump by millions of dollars. Ultimately legal costs will go up.
Another example of escalating salaries is mid-level public relations workers. A report issued by Spring Associates, Inc., the executive search firm specializing in PR, indicates that these PR workers will see salary increases in the 18-35% range when changing jobs. The company also cited big increases in starting salaries and sign-on bonuses, all a reflection of the enormous pressure to find talented workers.
iness commentators consistently express their astonishment at how restrained salary increases have been in the face of a boom economy and nearly full-employment. The real answer is that in selected segments, wage inflation is soaring. Two examples found in yesterday's press point this out: one for law firm associates, the other for mid-level Public Relations staffers.