Peace of Mind
LAT‘s
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.
Methodology
LAT 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.
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