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"I Want To Be Surveyed!"


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Peace of Mind

LATs 13th Annual Survey Salary results.
By Rod Hughes
March/April 2005 Issue

There is comfort and peace of mind in numbers, and for paralegal salaries, that saying seems to have held true in 2004. Despite questionable economic conditions, legal assistants ­experienced continued salary growth in 2004, albeit smaller growth than in years past. For the second consecutive year in Legal Assistant Today’s Annual Salary Survey, the national average salary for paralegals increased, however, that rate of growth was smaller than in the preceding two years. LAT’s survey of 2002 showed an average rate in salary increase of 4.5 percent for ­paralegals over 2001’s average figure. That finding was a decrease of nearly 5 percent from the rate of rapid-growth found in LAT’s 2001 Salary Survey. In 2003, the rate of growth slowed to 3.1 percent. For 2004, LAT’s survey found the average legal assistant salary continued to grow, but only at a rate of 2.5 percent when compared to the average salary of 2003.

Susan Maginnis, director of Paralegal Placement for Pat Taylor & Associates in Washington, D.C., said her company was seeing a completely different trend in terms of the rate of salary growth. “In 2004, the market really opened up with paralegal jobs. We were coming out of the recession and a lot of people had been holding on to their jobs before that. Employers were holding on to their people as well,” Maginnis said. She explained that her company saw 2003 as more of a slow growth period for paralegal employment than 2004. She said even at the very beginning of 2005, she is seeing increased demand for entry-level paralegals when normally that demand peaks much later in the calendar year, closer to the spring and fall.

However, the placement director for Legal Network, a Special Counsel Company, disagreed with Maginnis’ employment market perspective, at least in terms of market influences in Western Pennsylvania. Brenda Dodd, a paralegal for 13 years and Legal Network’s placement director in Pittsburgh, said LAT’s findings in terms of salary growth rate seemed accurate for what she is seeing, specifically in the Pittsburgh area, as well as other areas of the country. Legal Network, acquired by Special Counsel in 2004, places paralegal employment candidates throughout the United States.

“I think with the economy being what it is, many law firms are using their associates to handle paralegal work and they just are not hiring as many paralegals right now,” Dodd said. However, Dodd was quick to note  that although employers she knew of were not hiring large numbers of paralegals in 2004, those same employers were working to retain their paralegal workforce where possible.

Growth in salaries is still growth, as any employee will tell you. And 2004 was a year of growth, as raises, benefits and general perks continued to help balance out the overall compensation package.

For 2004’s working paralegals, the average national annual salary stretched to $45,935, an increase of $1,127 more than LAT’s findings from the prior year. Another bright spot was the reversal of a multi-year trend in LAT’s Annual Salary Survey. For four of the past five years, the average raise reported in LAT’s surveys has been on a steady decline. In 2000, respondents reported the highest average annual raise ($2,656) LAT had recorded at that time. That amount declined steadily in each subsequent year until the results from the 2004 survey revealed a more than $300 increase in the average national raise paralegals reported.

Perks and Benefits
In addition to salary and raises, most paralegal survey respondents enjoyed benefits that included some form of medical insurance coverage, a 401k retirement plan, overtime compensation and paid vacation time.

“A lot of job seekers like to get a bonus. A number of the firms we work with require a certain number of billable hours, so these paralegals like to have an incentive for their effort, so bonuses are an important part of my job seekers’ benefits,” Maginnis said. And it was benefits and raises that seemed to balance out the overall compensation package along with a slower rate of salary growth in 2004, Dodd said.

According to LAT’s findings, 93.8 percent of paralegals have paid vacation time. From Maginnis’ perspective, vacation time or paid time off often ranks as one of the top priorities when potential employees are considering benefit packages. “These people work very hard, and often work long hours on a regular basis, so they value their time off,” she said. Some legal employers have recognized that and acted accordingly. “We have a few clients who offer a 35-hour work week, and some even pay overtime immediately on the 36th hour of work. Not many firms offer that type of benefit, but a few have taken that forward-looking approach,” Maginnis said.

In addition, 88.3 percent of paralegals enjoy some form of health benefits, 68.3 percent have life insurance coverage through their employers, 57.1 percent can participate in dental insurance plans, 65.8 percent have professional association dues or membership fees paid by their employer, and 62.9 percent have employers who contribute in some manner to continuing education. In addition, 20.4 percent of respondents reported being allowed to work from home. Adding to an ongoing list of unique benefits, LAT’s 2004 survey found some paralegals being offered the use of employer vehicles when traveling on official business, child care reimbursement, medical savings and reimbursement plans, stock purchasing plans, paid memberships to wholesale outlets such as Sam’s Club and Costco, personal electronic equipment (i.e., BlackBerrys and Personal Digital Assistants), as well as free lunches and office snacks.

Regarding staffing support, LAT’s survey found nearly 9 percent of respondents reported having a designated secretary to assist them in 2004, while 44.5 percent of respondents said they share the use of a secretary in the course of their work. In LAT’s 2003 survey results, 10.1 percent of respondents had a designated secretary, while 50.4 percent shared a secretary. While these are slight decreases in overall support compared to the 2003 survey, they still are ahead of the 2002 LAT salary ­survey findings.

Contentment and Compensation
While 2004 was not a stellar year of financial gain, respondents to LAT’s Annual Salary Survey seemed increasingly at ease with their employment and compensation. When asked if they were paid fairly for the work they perform, 68.4 percent of survey respondents said yes. This is an increase of 1.4 percent more than 2003, and a measured, year-to-year increase in financial satisfaction since 1999. Of those who answered in the affirmative, the average annual salary in that category was $48,887. Those paralegals who reported they were not paid fairly for the work they perform — 31.6 percent of respondents — averaged an annual salary of $40,326.

Who feels he or she is paid most fairly? Of those who said they were paid fairly, 70 percent worked in law firms, 63.6 percent worked in a corporate environment and 41.2 percent worked for the government.

Dodd said the state of the economy and lack of upper-level, senior paralegal movement might be significant factors in the survey’s finding of increased satisfaction. “There are not a lot of paralegals moving around and changing jobs, and that certainly was the case in 2004, from what I have seen. Depending on their tenure, most paralegals probably are making considerably more money than when they started, so any move in this economy might only be a lateral move. In a slow economy, you don’t tend to see many vertical moves,” Dodd said.

Patricia Zitkovic, a paralegal specialist with Scottsdale Insurance Company in Scottsdale, Ariz., said for her, overall job satisfaction and being paid fairly has to do more with the overall employment package than mere salary. “I think it’s a combination of employment factors. The perks and benefits really go a long way toward overall satisfaction. I think perhaps when you are starting out or when you are younger, the salary is it. But with experience you really learn that the benefits and perks, along with salary, are at the center of work satisfaction. I know they are for me,” Zitkovic said.

Other notable findings from LAT’s 2004 survey include an increase in the average highest reported raise ($26,700). That figure is more than double its 2003 counterpart. Only LAT’s survey results from 2002 have demonstrated a higher average figure in this category.

Average salaries by employer type also increased in 2004, with those working in law firms gaining an average of $132 compared to 2003, while government paralegals saw their average salaries increase by $2,470. Corporate legal assistants experienced the largest gain of the three job market categories with an average salary increase of $3,086 in 2004.

However, there were areas where paralegals failed to make financial headway compared to LAT’s findings for 2003.

In 2004, average bonuses for paralegals working in law firm and government settings declined — dramatically for government workers — while corporate paralegals were spared, experiencing a nearly $300 increase in average bonuses compared to the previous year. Also, the lowest average full-time salary reported in LAT’s survey fell by $2,000 in comparison to 2003, landing at $15,000.

For 2004, only 20.8 percent of survey respondents said the number of paralegal positions available in their market increased. At less than 21 percent, that is the lowest figure recorded since LAT began asking the question in 2001. Better results were found when respondents were asked if the number of paralegal positions in their market were decreasing. Only 9.2 percent of respondents said they saw a decrease in available positions, a more than 2 percent decrease from the prior year’s findings.

Where the Rewards Are
For some paralegals, just being comfortable isn’t always enough. So where are paralegals making the most, and in what areas of law?

It turns out, for the first time since 1999, LAT survey respondents report the highest average regional salary ($50,748) in the Northeast Region of the United States. Since at least 1999, Western Region respondents to LAT’s surveys have held the highest average salary when broken down geographically. Also noteworthy is that for the first time since 1999, legal assistants in the Western portion of the country have reported a decline in average regional salary. Western paralegals earned an average of $48,503 in 2004, a decrease of 2.2 percent when compared to 2003’s figures. Additionally, 2003 offered the lowest rate of average salary increase for Western paralegals in all of LAT’s prior surveys, increasing only 1.5 percent over the year prior.

With the Western region of the country coming in second in regional salary averages, the next highest regional segment of the country was the Midwest with an average salary of $44,114, a 3.1 percent increase over 2003. The Southern region of the United States rounded out LAT’s four-region breakdown with an average salary of $42,601, less than half a percent increase as compared to the prior year.

As for earning power in 2004, much of it depended on what segment of the law paralegals worked in. The top five average earnings for law firm paralegals, broken down by practice area, included: contracts ($92,125), securities ($64,750), tax ($53,250), environmental ($51,283) and intellectual property ($50,030). For those working in a corporate legal setting, the top five average salary practice areas were: mergers and acquisitions ($57,252), international ($55,754), securities ($54,925), corporate gov­ernance ($54,676) and litigation ($51,383). Of those two environments, the largest two segments of respondents came from contract paralegals working in law firms (8.9 percent of law firm respondents) and litigation legal assistants working in corporate environments (47.9 percent of corporate respondents).

Exemptions and Billing
The past two years have shown the average number of paralegals considered to be exempt on the decline (48.5 percent in 2004 and 49.2 percent in 2003), although the average salary of those claiming exempt status has continually increased since 1999.

“I think it’s very difficult to ask paralegals to work long days and not compensate them for it. I think, as a general rule, it’s hard to have paralegals in an exempt category. It’s just not the type of job that lends itself to exempt status. However, paralegal managers, because they serve more of a management function, tend to fit better into this category,” Maginnis noted. She also said the decision on exemption status remains in the employer’s purview.

For Dodd, who said she plans to return to paralegal work and leave her placement director position in 2005, the trend toward nonexempt status should be considered a blessing. “Exemption status being on the decline is a good thing; a benefit for paralegals,” Dodd said. She said it’s an opportunity for increased earning power many paralegals will welcome.

For those paralegals required to bill their time to client matters, their numbers increased slightly more than 1 percent in 2004 compared to the year prior. In another LAT first, the race for top billing category proved to be tied in 2004. When asked for their average billing rate, paralegal respondents tied two categories, each with 18.7 percent of respondents. As a result, the two highest billing categories with the largest percentage of LAT respondents were the $66 to $75 per hour billing range, and the $96 to $115 per hour range. For the former, the percentage of paralegals billing in that range has declined slightly. For the latter category, paralegals billing in that range increased by 4.5 percent compared to the previous year. Of those who must bill their time, 26 percent of respondents said they spend anywhere from 11 to 20 percent of their time on nonbillable tasks.

Academic Achievements and Personal Preference
As LAT’s prior salary surveys have shown, in many cases higher levels of education seem to translate into increased earning power. Legal assistants who reported high school as their highest level of formal, general education earned, on average, about $5,000 less than their counterparts with bachelor’s degrees.

Dodd said the $5,000 disparity between high school graduates and four-year college graduates is about accurate. “Firms looking for mid- to-upper level paralegals seem to believe it’s important for those paralegals to hold bachelor’s degrees,” Dodd said. However, she made a distinction when talking about entry-level paralegal positions. “Entry-level paralegals will need to have bachelor’s degrees in the future. Employers seem to place a high value on paralegals who seek higher education for these positions,” Dodd said.

Paralegals with American Bar Association-approved paralegal certificates, general paralegal certificates and the Certified Legal Assistant designation all reported earning salaries  around $46,000 in 2004. Respondents who held the RP designation (6.4 percent of total respondents) earned an average annual income of $53,378.

According to Maginnis, legal employers who work with Pat Taylor & Associates generally require paralegal employment candidates to hold bachelor’s degrees, and most require at least a 3.0 grade point average from what Maginnis termed a “reputable, rigorous academic program.”

In Nebraska, paralegal Patricia Davis said she has noticed a trend where employers increasingly are seeking paralegal candidates with degrees, and the higher the degree level, the better, she said. “Of course, your experience is important, but it comes second to a degree,” Davis said. She also said she felt that in the near future, both entry- and mid-level paralegals will need degrees to grab the attention of potential employers.

Arizona’s Zitkovic agreed. Zit­kovic said she considered relocating to Texas in 2004, and in the course of her job search noticed nearly all of the entry-level paralegal positions she came across required bachelor’s degrees. “Bachelor’s degrees, even if they are not in paralegal studies specifically, are going to be the norm for employment in the future,” Zitkovic predicted.

While education clearly impacts paralegal salaries, one aspect of the legal assistant employment market that can’t go unaddressed is that of titles. Everyone has his or her personal preference, and in some cases titles are dictated by regional or even employer standards. Last year, LAT began asking survey respondents to consider which title they think denotes higher professional status. The 2004 findings don’t vary greatly from 2003, with 80.5 percent favoring paralegal and 3.6 percent favoring the title legal assistant. However, it’s interesting that 29.5 percent of the total respondents reported belonging to the National Association for Legal Assistants whose title still has the legal assistant name in it, and only 23.1 percent of respondents reported belonging to the National Federation of Paralegal Associations.

“There are some people who still use the terms interchangeably. However, the Legal Assistant Management Association changed its name to the International Paralegal Management Association at the beginning of the year, and I think that decision, because of its membership and affiliations, is a clear indication the paralegal title is more descriptive and better favored in the market,” said Maginnis, herself a 13-year paralegal veteran and former legal assistant manager.

Placated or Satisfied?
As in recent years, LAT’s 2004 Salary Survey respondents found satisfaction in various aspects of their overall state of employment while hoping for better times ahead. The broadening of benefits, steady salary increases and expanded workplace challenges are all areas paralegals pointed to in 2004 to demonstrate a measure of consolation. However the lack of robust paralegal employment opportunities in various regional markets and the declining rate of salary growth are two critical areas of concern and consternation for many legal assistants.

While surveys act as guides, each paralegal must look at his or her own situation and ask the question: Am I satisfied with the direction of my career and compensation, or merely placated while I wait for greater challenge, opportunity and income potential? Unfortunately, no survey can decisively answer that very personal question. In the end, the true answer is the one you — and you alone — find most reassuring.

conducted its 2004 salary survey by mailing a questionnaire to a random sampling of 2,000 of LAT’s current, paid subscribers. The resulting data is illustrated in the included charts, and includes a margin of error of plus or minus 6.2 percent. Final data was compiled from the 13 percent of respondents who completely filled out the survey and returned it by the Dec. 3, 2004 deadline.

Rod Hughes is a public relations representative for two East Coast offices of a top 25 international law firm. Most recently he was the proprietor of Hughes Media, specializing in freelance editorial, writing and public relations services. Hughes has served as editor and publisher of LAT and its sister publication, Law Office Computing, as well as editor of three international litigation newsletters published by Mealey Publications Inc., a subsidiary of LexisNexis. He can be reached at [email protected].

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Updated 08/30/07
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