Welcome to Original Jurisdiction, the latest legal publication by me, David Lat. You can learn more about Original Jurisdiction by reading its About page, and you can email me at davidlat@substack.com. This is a reader-supported publication; you can subscribe by clicking here.
A version of this article originally appeared on Bloomberg Law, part of Bloomberg Industry Group, Inc. (800-372-1033), and is reproduced here with permission. The footnotes, which contain material that didn’t appear in my Bloomberg Law column, are bonus content for Original Jurisdiction subscribers.
On June 2, Milbank announced a new associate pay scale. Raising base salaries by $10,000 to $20,000, depending on seniority, the updated scale starts at $235,000 for first-year associates and tops out at $455,000 for eighth-year associates. Two weeks later, it has been adopted by more than a dozen firms—with more likely to follow.
Stories about associate compensation are usually of interest mainly to associates.1 But this latest salary increase merits closer examination by anyone interested in the world of elite law firms, since it offers an excellent window into the current state of Biglaw. Here are my four takeaways.
1. Top firms are thriving—and sharing the wealth with their associates.
The most obvious conclusion to draw from the pay hike is that some firms are doing very well for themselves. As Milbank chairman Scott Edelman wrote in his memo announcing the raise, “We have been very busy across the entire firm over the first five months of the year and expect that the high levels of activity will continue for the remainder of the year.”
Milbank posted revenue per lawyer of $2.085 million and profits per equity partner of $7.6 million in 2025—reflecting 8% and 12% increases, respectively, compared to 2024. And based on Edelman’s memo, it sounds like the firm is on track to do significantly better in 2026 (barring something unforeseen, like a recession).
“The salary increase for associates isn’t because the price of eggs or gas has gone up,” Peter Zeughauser, a partner at the Zeughauser Group consultancy, said in an interview. “Partners are saying to themselves, ‘We’re doing really well—and we should pass some of that along to the people who are helping us make all this money.’”
Biglaw associate salaries last went up in 2023. During the intervening three years, compensation for the highest-paid equity partners has skyrocketed—with some earning more than $40 million a year.
“The dramatic increases in what top partners are making are reported in the news and well-known to associates,” Zeughauser said. “Too much disparity is bad for morale. What we’ve seen historically when this has happened, and what we’ve seen just now, is an associate pay increase.”
2. Traditional hierarchies have been upended.
There was a clear pecking order among firms when I first started covering Biglaw 20 years ago. The top tier consisted of venerable, white-shoe firms, founded in New York more than a century ago—such as Cravath (1819), Sullivan & Cromwell (1879), and Davis Polk (1849).2
Their preeminence manifested itself in a number of ways. They enjoyed the highest profits and greatest prestige (with a handful of younger firms, including Wachtell Lipton and Skadden Arps, thrown into the mix). They rarely lost partners to rivals. They paid their associates the most. And they led the way on associate pay raises—with Cravath such a clear market leader that the prevailing Biglaw salary scheme was called the “Cravath scale.”
It might be time for the “Milbank scale” to take its place. Over the past decade, Milbank has led all six associate pay raises—in 2016, 2018, 2021, 2022, 2023, and 2026. (Founded in 1866, Milbank has a long and distinguished history, but it’s fair to say it wasn’t seen as in the same league as Cravath until recently.)3
The diminishing dominance of old-line New York firms can be seen in other ways as well. Most notably, when it comes to having their partners poached, firms like Cravath are no longer impregnable fortresses.
Cravath itself has lost at least nine partners so far in 2026. Two of them went to Paul Hastings—founded in Los Angeles in 1951, and today a major player in the lateral market.
3. Litigation boutiques are here to stay—and a force to be reckoned with.
At least 17 firms have announced associate raises this month. But only five are among the nation’s 100 highest-grossing law firms: Milbank, McDermott Will & Schulte, Quinn Emanuel, Katten Muchin, and Susman Godfrey.
Most of the rest are elite litigation boutiques, including Hueston Hennigan, Elsberg Baker & Maruri, Wilkinson Stekloff, Desmarais, Kellogg Hansen, Holwell Shuster & Goldberg, and Yetter Coleman. And even though Quinn and Susman are top 100 firms based on revenue, they’re litigation-only rather than full-service firms.
Today, leading boutiques compete with Biglaw not only for talent, but also for cases and clients. Chief legal officers and general counsel are increasingly comfortable with sending their most important matters to boutiques—which can make up for their lower headcounts by partnering with larger firms or leveraging the power of technology, including artificial intelligence.
Given the rise of boutiques, I’d like to propose a new term: “Prestige Law.” It would encompass the large firms traditionally known as “Biglaw” and the smaller firms that play on the same turf.4
4. AI hasn’t killed off demand for associates, and it might be a long-term boon for them.
AI has taken the legal profession by storm over the last few years. Does it make sense for firms to raise associate pay when AI tools can now complete many of the tasks that used to be performed by associates?
“The AI piece hasn’t settled out yet,” Zeughauser said. “We don’t have enough experience yet with the impact of AI to determine how many associates firms need. You see different views on that within Biglaw—with some firms shrinking, some expanding, and some staying the same.”
My own view is that the combination of pay raises and AI could be a good thing for associates.5 If junior associates are increasingly expensive and not immediately profitable because AI tools will do much of what they used to do, firms will have more of an incentive to invest in young lawyers.
If an associate leaves their firm after only two or three years, the firm didn’t get a great return on its investment. So firms will want to give their associates positive experiences, encouraging them to stick around to the point of maximum profitability. Firms will also focus more on professional development and training: With AI handling more rote tasks, associates will be expected to do more sophisticated work earlier on in their careers.
Even if firms substantially reduce associate headcount, they’ll need at least some associates for a very long time. For starters, they need tech-savvy associates to operate and supervise AI tools—because when lawyers don’t review AI output, bad things happen.
And partners, whose necessity is undisputed, don’t just show up fully formed, like Athena from the head of Zeus.
“To have partners, you need to have associates, and to have senior and midlevel associates, you need to have junior associates,” said Zeughauser. “So someone has to hire first-years—because you need that pipeline.”
The first-year associates of today are the partners of tomorrow. Or put another way, those $40 million partners were once first-year associates.
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As I know from my time at Above the Law, associates tend to get very excited about pay raises—and understandably so, given the heavy debt loads many of them are carrying from law school. But as one reader pointed out to me, “When I graduated law school in 2010, first-years were paid $160,000. Well, guess what: $160,000 in 2010 is around $244,000 today, when you adjust for inflation. Associates getting paid $235,000 isn’t a big deal when you realize how little a dollar goes anymore.”
A fair point. But to the extent that associate salaries don’t go up each year—i.e., there’s no annual cost-of-living adjustment—every raise is a source of excitement for associates, even if the net effect is keeping up with inflation. Here, the last raise was three years ago.
You know whose compensation has beaten inflation? That of equity partners. In 2010, profits per partner for the Am Law 100 clocked in at $1.36 million. That sum, in December 2010, would be the equivalent of $2.01 million in December 2025. But actual profits per equity partner (PEP) in 2025 amounted to $3.59 million, meaning that PEP increased at a rate more than three times faster than inflation.
In 2006, the year that I launched Above the Law, these were the top 10 firms in the Vault 100 ranking of the most prestigious law firms (with their current rank noted parenthetically, to facilitate comparison):
Wachtell, Lipton, Rosen & Katz (2)
Cravath, Swaine & Moore (1)
Sullivan & Cromwell (5)
Skadden, Arps, Slate, Meagher & Flom (3)
Davis Polk & Wardwell (7)
Simpson Thacher & Bartlett (10)
Cleary Gottlieb Steen & Hamilton (16)
Latham & Watkins (4)
Weil Gotshal & Manges (15)
Kirkland & Ellis (6)
The two biggest gainers between 2006 and 2026 were two firms not founded in New York: Latham, launched in Los Angeles in 1934, and Kirkland, which traces its origins back to a Chicago-based partnership founded in 1909. They are now, of course, the world’s two largest firms in terms of revenue, with Kirkland at $10.6 billion and Latham at $8.3 billion.
As recently as 2018, Milbank was #40 in the Vault 100 prestige ranking. But after it led the way on that year’s associate pay raise, taking starting salaries to $190,000, it climbed 15 spots to hit #25. And after being the first mover on a slew of salary hikes, it broke into the top 10 in the 2026 Vault ranking, rising four places to #9.
On LinkedIn, one lawyer compared my proposed “Prestige Law” to “fetch” from Mean Girls—as in, “Stop trying to make ‘fetch’ happen. It’s not going to happen.” I’m not wedded to “Prestige Law,” and I’m open to other ideas on terminology. My main point is that in 2026, Biglaw is no longer the center of the legal universe; going to a boutique isn’t necessarily a “downgrade,” as it almost always was 20 years ago; and we should have a term that reflects this market evolution.
In a very interesting Bloomberg Law opinion piece, Lowenstein Sandler chair Gary Wingens made the case for AI benefiting junior associates, not eliminating their jobs. Some of his points:
“AI will create more work for firms, including our most junior lawyers, and let us deliver the services clients want at lower cost and higher quality.” Yes, the economic model might change, with the billable hour losing its dominance—but that doesn’t mean the clients and work will go away. Instead, “[a]s work becomes faster and cheaper, clients will buy more of it, not less.”
“[T]he surge in work will come from two directions. First, the cost of the routine parts of legal work is falling, sometimes dramatically, even as the value of the judgment around that work keeps rising…. [Second,] our clients will become more productive. For example, the private fund managers we represent will use AI to vet more deal flow and negotiate more private equity and venture transactions each year, and more transactions mean more legal work.”
“[O]n the larger and more complex matters, AI makes our junior lawyers more productive while giving them something I never had, a co-pilot they can engage with to explain an unfamiliar provision or a theory of a case that will improve their training and their ultimate work product.”
So in the end, according to Wingens, “AI doesn’t so much replace the junior lawyer as raising the floor on what a junior lawyer can do, and the client is the one who benefits.”
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David, I would be keen to hear your thoughts on how associates develop legal judgment as they use AI tools. How exactly would that work?