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How Big Is Your Piece of the Pie?
Paralegals carved out a large salary increase in 2001.
By Rod Hughes

March/April 2002 Issue

Following the events of Sept. 11 and the apparent deepening of the U.S. recession, many paralegals might think their share of the financial pie has spoiled. Not so, according to Legal Assistant Today’s (LAT) 2001 National Salary Survey. In fact, in 2001 legal assistants as a whole enjoyed one of the largest slices of increased salaries in more than six years, according to LAT’s findings. The average salary for paralegals in 2001 increased by an amazing 9.4 percent over 2000’s salaries, reaching $41,599 in a year marked by steep economic decline. In addition, 70.6 percent of respondents indicated they received a bonus, averaging nationally at about $3,058. While the nation was largely concerned with safety and the ability of workers to put food on the table last year, paralegals continued to enjoy the just desserts of a growing profession.

In an interesting comparison, according to LAT’s 1995 Salary Survey, the average paralegal salary was then just $31,503. In the last six years, paralegals have seen their salaries increase by an average of $1,700 per year. Additionally, the largest year-to-year percentage increase in recent memory was just 4.9 percent when comparing 1996 salaries to their counterparts in 1995. At the close of 2001, LAT found salaries increased by nearly twice as much.

Mary Ellen Perkins, president of the Legal Assistant Management Association (LAMA), said she was surprised at hearing of a nearly 10 percent salary growth rate between 2000 and 2001.

“If [law firms] are turning more to legal assistants from a cost-cutting perspective — giving work to paralegals instead of associates — [the average salary increase] would make sense,” Perkins explained.

National Association of Legal Assistants (NALA) president, Pat Elliott, CLAS, was equally surprised at the growth in average national salaries in just one year.

Elliott said she hoped one reason for salary growth in 2001 was due to better use of paralegals as a cost cutting measure. “We can save clients money,” she added.

Other organizations analyzing legal assistant pay scales in 2001 included the National Federation of Paralegal Associations (NFPA), which recently issued the results of its own bi-annual salary survey. NFPA determined that in 2001, paralegals earned an average of $41,721, with an average bonus of $2,468.

Salary figures for 2001 from NALA and LAMA were not available at press time.

In a more broad-based profession overview, The Affiliates 2002 Salary Guide found midlevel-experienced paralegals (those with four- to-six years experience on average) earned salaries in an average range of $37,875 to $48,500, regardless of firm size in 2001. A specialized legal staffing firm, The Affiliates reported its data was derived from job searches, negotiations and placements conducted by its North American offices in 2001. It’s worth pointing out that case clerk workers were included in The Affiliates survey analysis of paralegal salaries.

Meanwhile, LexisNexis reported on Jan. 29 that “most recent paralegal salary surveys consistently indicate that the average paralegal had an annual salary of approximately $41,000 in 2001.” LexisNexis didn’t specifically identify which surveys were used to support the company’s conclusion, however, both NFPA and The Affiliates were named as salary information resources, along with Monster.com.

Putting aside bottom-line figures and turning more to perception of the market, LAT’s survey indicated 65.2 percent of respondents with average salaries of $44,004 felt they were paid fairly, an increase of 4.4 percent over findings from 2000. Conversely, 34.8 percent of 2001 respondents with average salaries of $37,440 claimed they were unfairly paid — a decrease of 4.4 percent compared to LAT’s 2000 findings. These figures indicate that on average, legal assistants on a national scale increasingly feel salaries are moving toward more acceptable levels.

“The people I speak with regularly at conventions and conferences, I think these people are very happy with their jobs. I don’t think we are seeing as much moving around in terms of switching jobs,” Elliott explained.

Perkins agreed with Elliott, and noted that the growing rate of satisfaction may also have to do with efforts made within the paralegal field as well.

“I think we are seeing paralegal stature improving. As regulatory schemes are looked at and the activity of paralegal associations increases … a message is getting out about the effectiveness of paralegals,” Perkins said, adding that increased satisfaction with legal assistant salaries is tied closely to the education of lawyers about the roles and responsibilities of paralegals.

The Crème de la Crème
The top three specialty areas in which to work, in terms of volume of respondents rather than salary figures, remained consistent with findings from 2000. For 2001, the largest number of respondents — 47.3 percent; down 5.4 percent from 2000 — worked in the field of litigation with an average salary of $41,619. The next largest group, 22.1 percent of those who responded, worked in personal injury law and averaged an annual salary of $37,830 last year. Corporate paralegals, averaging $44,838 in annual compensation in 2001, rounded out the top three fields of law ranking at 18.9 percent of the total respondents.

The top three leaders in highest average salary more or less continued to grow beyond 2000’s highs, yet offered somewhat interesting results. For 2001, intellectual property ($52,540), mergers and acquisitions ($49,002) and product liability ($48,915) proved to offer the most earning power for legal assistants. Mergers and acquisitions ceded its number one spot in 2000 to intellectual property in 2001, and even took a slight dip in earning power, dropping $71 from its 2000 high. Meanwhile, product liability managed to edge out last year’s big number three player, banking and finance, which appears to have taken a nearly $3,000 nose dive compared to its 2000 average. For 2001, criminal law supplanted family law in terms of lowest national earning power, averaging $31,253. The last year LAT measured criminal law as last in terms of salary was in 1999, when it averaged $26,592 for the year.

Specialty practice areas not withstanding, the Western region of the United States took the biggest bite of legal assistant salaries for the second year in a row, with paralegals in the Western states earning an average of $45,620 in 2001 — a $5,248 increase over 2000. The Midwest region, as it has consistently done since LAT’s 1997 Salary Survey, reported the lowest average annual legal assistant income for 2001 at $36,376. Unfortunately, as a whole, Midwestern paralegals managed to increase their 2000 salaries by an average of only $626 in 2001.

A Variety of Spices
Looking beneath the surface, there were a number of ingredients that came together to create the national averages for 2001 in the paralegal marketplace. Fifty-three percent of respondents reported being classified as nonexempt employees by their employers, while 47 percent said they were considered exempt. Nonexempt employees earned an average of $498 more than their exempt counterparts nationally.

As for billing, 53.2 percent of paralegals who responded to the LAT survey by the Dec. 14 deadline reported their employers billed clients for paralegal time spent on client matters, while 46.8 percent didn’t bill for their time. Of those who did bill for their time, 20.7 percent reported their time was billed to clients within a $76 to $85 per hour range. Nineteen percent billed between $66 and $75 per hour, while 11.6 percent billed between $56 and $65 per hour. Slightly more than 49 percent of paralegals who were required to bill their time in 2001 reported having to meet a minimum of between 1,401 and 1,600 hours per year. Of those who billed, 23.1 percent said between 6 and 10 percent of their time was spent on nonbillable tasks.

Recipe for Paralegal Work
Of those who responded prior to the survey deadline, 69.1 percent of paralegals said they identified themselves using the paralegal title, versus 31.3 percent who use the title legal assistant. Included in both responses were those who use both titles.

“We are seeing an ongoing debate [in terms of title],” Perkins said. “To some extent, it’s geographic. There is a great deal of concern on the part of paralegal associations on the muddying of the distinction between the paralegal or legal assistant titles and the legal secretary title. I don’t know that we are going to settle on a single term.”

From Elliott’s perspective, the terms remain — for now — unalterably intertwined.

“If you look at all of the court cases and the [American Bar Association’s] definition, they use the terms paralegal and legal assistant interchangeably. Within our own organization, every year or so we ask that question of our membership. We have asked which title our members prefer and they have come back more or less evenly split,” Elliott said.

Regardless of title, the makeup of the typical paralegal position demonstrates that last year’s findings regarding paralegal duties are largely unchanged. Document management, client relations and research were 2001’s top priorities for paralegal duties, while there was a marginal move away from clerical work with 31.5 percent of 2001 respondents handling this task in contrast to 32.7 percent of 2000 respondents.

One of last year’s significant improvements over 2000 was a 28 percent jump in the number of paralegals sharing a secretary, thus allowing paralegals to continue working on more substantive legal matters under the supervision of an attorney.

Available Positions, Dough Both on the Rise
In 2001, 27 percent of paralegals who responded to LAT’s survey said they witnessed an increase in paralegal hiring by their employers compared to 25.5 percent from the year before.

What is most interestingly reflected in these figures is that, despite the state of the economy, 2001 showed an overall drop in the nationwide percentage of paralegal positions lost during the year. Just 7.7 percent of respondents said available paralegal positions with their employers decreased in 2001, versus a 9.1 percent decrease in 2000.

Overall, the estimated loss of paralegal positions in 2001 was not a bad average when considering overall unemployment rates had been rising steadily last year until January 2002.

“From what I understand and what I have seen personally, (the job market for paralegals) has mostly stayed the same. A couple of firms I know have had hiring freezes, but I haven’t seen major cuts in terms of legal assistant positions. In the Phoenix area, we still have a good job market for paralegals. We’re still hiring,” Elliott said.

A majority of paralegals (81 percent) with less than three years experience reportedly began their careers working in the law firm environment. Law firms in 2001 continued as the dominant employer of paralegals who had between three- and-five years experience (88 percent), while corporate and government entities tended to more frequently retain paralegals with five- to-seven years experience or more.

With a slight improvement nationally on the available job front, salaries based on firm size or field of law also took an interesting turn in 2001. Legal assistants working in law firms or for the government saw their average overall salaries rise by nearly $4,000 compared to 2000’s findings, while corporate paralegals saw a more modest increase of about $2,700 over the prior year. “I would think the law firms are where the money is,” Perkins said, herself a corporate paralegal. “Working in a corporate law office is a lifestyle choice in terms of less overtime and what-have-you, whereas law firms are where the real money usually is at.”

And while paralegals working for law firms with more than 100 attorneys continued to earn more than any other group for the third year in a row, legal assistants working for law firms with between 26 and 50 attorneys reported earning an impressive average of $9,700 more than the same group in LAT’s 2000 findings.

No Preservatives Added
It has long been understood that while salary is one of the most important issues for employees, benefits and perks offered by employers sometimes rank nearly as high on the priority list. In 2000, LAT found 83.1 percent of respondents had employers who either paid or shared in the costs of continuing education opportunities for paralegals. By comparison, the number of employers in 2001 who offered this benefit grew by less than 2 percent. Additionally, 82.7 percent of this year’s respondents said their employers offered a 401k or other retirement-related program, up just 1.1 percent from the year before.

Given the economic upheaval of 2001, it isn’t surprising to discover employers efforts to control costs by offering more dough — literally — and less filling. Despite the average decline in added employee incentives, a few interesting perks were reported sporadically throughout the country. A handful of legal assistants called attention to some of their more unique employment benefits which included: charitable contribution matching; special occasion dinners (anniversary, birthday, graduation) paid for by their employers; an in-house gym, complete with a personal trainer; free legal services; and telecommuting options.

While the scope of legal assistant benefits and perks may not have broadened significantly in 2001, the diversity of what was made available is noteworthy in itself.

Polished Apples
Consistently identified as the single most important factor in the professional advancement of the paralegal community, education proved to be a means to higher salaries in 2001, according to LAT’s Salary Survey. The highest earners, as determined by educational experience, were the 5.4 percent of respondents who reported holding master’s degrees. This group averaged approximately $45,899 annually in 2001, followed by 46.8 percent of respondents with bachelor’s degrees who earned an average of $42,171 last year. Paralegals holding associate’s degrees (32.9 percent of respondents) reported an average income of $40,021 in 2001, ranking about $1,500 below paralegals without degrees (14.9 percent), who reported $41,567 in annual average compensation. Of those responding with education information, legal assistants with associate’s degrees saw their incomes improve by 15.5 percent over 2000 figures. Those with bachelor’s and master’s degrees saw their average salaries rise 10 percent and 5.9 percent respectively over the previous year. Those without degrees experienced a less-than 1 percent growth rate in annual salaries compared to 2000 figures.

In a reversal of fortunes from LAT’s 2000 findings, 4.9 percent of paralegal respondents holding the PACE (Paralegal Advanced Competency Exam) certification earned an average of $52,030 in 2001, while 18.8 percent of legal assistants who passed the Certified Legal Assistant (CLA) examination reported an average salary of $40,010. In 2000, the opposite was found with CLA-designated paralegals earning nearly $2,500 more annually than legal assistants who passed PACE.

Tying education to regional averages, paralegals holding master’s degrees in the Northeast region of the United States commanded the most earning power in 2001 with an average regional salary of $45,784. The Western region took the top regional salaries for legal assistants with bachelor’s and associate’s degrees with average annual incomes of $49,860 and $43,736 respectively. Legal assistants without degrees appeared to fare best in the Southern region of the United States with an average salary of $41,609, according to LAT’s findings.

When the Pie Is Gone
Many people take great satisfaction in polishing off that last slice of pie, and as a result, find nothing more disturbing than discovering their dessert missing. A cute analogy for sure, but one that can easily apply to the apprehension surrounding employment in difficult economic times.

In the 2001 Salary Survey, LAT asked paralegals to share their concerns about the job market by answering questions related to their employment goals and recent experiences. Less than 1 percent of respondents reported being recently laid off from their paralegal jobs in the 12 months preceding their receipt of the survey. While that figure reflects well upon the previous year, some paralegals are not willing to leave 2002’s economy to chance. Approximately 23.3 percent of respondents reported having looked for other paralegal work in the 12 months prior to receiving their survey, with 22.2 percent indicating they plan to look for new legal assistant positions in 2002.

“Our whole lives have changed (following Sept. 11), and we’re a little bit nervous about what is happening in the world. I think, in times of crisis, more people tend to take stock and stay put. I think [22 percent is] low given the fact that the country is at war,” Elliott said.

For Perkins, 22 percent of the paralegal market looking for work, given the economic woes of 2001, seems just about right.

“I know that whenever you have a downsizing situation, people start putting their feelers out there, and they sometimes find there are other employers out there who are willing to pay more. People who have no intention of leaving, when they get a whiff of a merger or a downsizing, suddenly they start looking and find better opportunities. It makes sense,” Perkins explained.

Precipitating factors that sent more than a few searching for work in this small but vocal group vary, however, a feeling of overall discontent seemed to fill each response.

Slightly more than half of all respondents who plan to look for a new paralegal job said they will do so because of low pay. Approximately 40 percent said they are no longer challenged by their work, and 28 percent reported their contributions are not recognized by their employers.

A small but noteworthy minority — 11 percent of respondents — said they intend to seek work outside the paralegal profession in 2002.

Of those paralegals who reported having to find work in 2001, either through lay-offs or their own desire to change paralegal jobs, a majority said they were able to find new jobs in the field within one- to-two months.

The Aroma of It All
2001 was truly an ironman year for many paralegals. Despite depressed economics, terrorism and a war, legalassistants made a number of noteworthy advances on the financial front when many might have predicted otherwise.

In addition, while some areas, such as benefits and perks failed to demonstrate dramatic improvements, paralegals held their own against incredible financial odds and lost little, if any, ground in the advancement of the profession and its earning power.

Legal Assistant Today conducted its 2001 Salary Survey by mailing a four-page questionnaire to a computer-generated, random sampling of 2,000 of the magazine’s current subscribers.
The resulting data is illustrated in the charts throughout this feature, and includes a margin of error of plus or minus 6.1 percent. The final data was compiled from the 13.6 percent of respondents who supplied verifiable names and addresses on the surveys by the Dec. 14, 2001 deadline.

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