Survey takes a closer look at PEP

July 9, 2014 The American Lawyer magazine has released the results of its survey of partner pay spreads among the biggest US firms. The survey is an attempt to get behind the PEP metric, the average profits paid to all partners, to see what people are really being paid by looking at the ratio between the compensation of the highest-paid partner and that of the lowest-paid partner.

Am Law provided the following overview of the survey results:

"At Perkins Coie, the range from most compensated partner to the least was 23 to 1. At the other end of the spectrum, the range at Fitzpatrick, Cella, Harper & Scinto was 3 to 1. That’s what we learned in our latest survey of compensation spread, with 107 Am Law 200 firms responding.

"Payouts to equity and nonequity partners are included in the calculations. For Am Law 100 firms, the average range in compensation was 11.1 to 1; the median was 10.0 to 1. For Second Hundred firms, average was 9.6 to 1; the median was 9.5 to 1.

"Last year, for Am Law 100 firms, the average spread was 10.5 and the median spread was 9.3, and for Am Law 200 firms (i.e., Second Hundred firms), the average spread was 10.5 and the median spread was 9.6. So it looks like pay disparities grew among Am Law 100 firms and declined slightly or stayed roughly the same among Am Law 200 firms."

The firms with the highest reported spreads in the survey are the following:

1. Perkins Coie – 23.0
2. Fish & Richardson – 20.2
3. Moore & Van Allen – 20.0
4. (tie) Barnes & Thornburg – 18.0
4. (tie) Sedgwick – 18.0
6. Goodwin Procter – 17.0
7. Bradley Arant – 16.9
8. GrayRobinson – 16.4
9. Seyfarth – 16.0
10. Locke Lord – 15.9

And the firms with the lowest reported spreads are these:
1. Fitzpatrick Cella – 3.3
2. Dykema – 4.0
3. Kenyon & Kenyon – 4.5
4. Phelps Dunbar – 4.6
5. Sutherland – 4.7
6. (tie) Kelley Drye – 5.0
6. (tie) Goulston – 5.0
6. (tie) Arent Fox – 5.0
9. Kutak Rock – 5.6
10. Thompson Coburn – 5.8

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