Big Law: What It Is and What Salary You Should Expect

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Big Law is a nickname for large, high-revenue law firms that are usually located in major U.S. cities, such as New York, Chicago and Los Angeles. These firms often have multiple branches, sometimes in smaller cities, as well as an international presence.

Lawyers at Big Law firms generally earn higher salaries than those in other private-sector law jobs. The most common starting salary for first-year Big Law associates is $190,000, according to the National Association of Law Placement.

» MORE: How to pay for law school

How Big Law firms determine salaries

Big Law firms typically use a scale that bases your salary on your law school class. The scale tends to be the same across most of these firms because they compete for the best students from the best schools. If one offers a higher salary, others tend to follow suit.

The most recent salary data from NALP places more than 29% of reported first-year associate salaries at $190,000. That matches the starting number at Big Law firm Sidley Austin, for example. Here’s that firm’s complete salary scale, according to the website Above the Law, which covers the legal industry.

Big Law firms use a scale by class year to determine bonuses as well. For example, here’s how Sidley reportedly structures its bonuses:

Is Big Law right for you?

Making that much money right out of law school probably sounds nice, especially if you owe close to the average $145,500 law students have in student loan debt. But life at a Big Law firm isn’t for everyone.

» MORE: Best law school loans

Seniors associates can be demanding; stress is inevitable. Tasks can be boring, too. For example, you may work long hours and late nights on one small aspect of a big project, such as drafting and redrafting a brief.

Life at a Big Law firm isn’t for everyone. Seniors associates can be demanding; stress is inevitable.

Big Law firms often offer summer associate programs to introduce you to this environment. These programs lead to the bulk of a firm’s new hires and typically come with law school scholarships. Spots in these programs are highly competitive, like the rest of the Big Law world.

Big Law and student loan debt

If you decide a Big Law career is for you, that high salary will give you options for managing student loans that may not make sense for lawyers earning less money.

You have several options to pay off student loans fast. The best is also the easiest: Pay more than you owe each month to reduce interest costs and shorten your repayment term. Use this student loan payoff calculator to see how much you could save.

Before putting extra money toward your student loans, make sure your financial house is in order. Pay off higher-interest debts, like bar exam loans, and put money toward an emergency fund and your retirement.

For example, Big Law attorneys may become ineligible for Roth IRA contributions early in their careers. Your modified adjusted gross income must be less than $203,000 to contribute to a Roth IRA if you’re married and file jointly. Take advantage of a Roth before paying extra toward your loans, if you can.

If you pair your Big Law salary with a solid credit score, refinancing your law school loans at a lower interest rate could decrease your monthly payments and the amount you owe overall.

For example, repaying $145,500 over 10 years would cost $1,689 a month and $202,726 overall, based on an interest rate of 7%. Refinancing at 5% would drop those totals to $1,543 a month and $185,191 overall.

Refinancing federal student loans can be risky because you’ll lose benefits like income-driven repayment and loan forgiveness programs. But going into Big Law likely lessens these concerns.

With your high salary, you likely won’t need to make payments based on your income. Working in the private sector would also make you ineligible for Public Service Loan Forgiveness and many other law school loan repayment and forgiveness programs.

If you already have private student loans and can qualify for a lower interest rate, refinancing can be a no-brainer.

Before making any move with your loans, think about your long-term career path. Are you planning to stick with Big Law for only a couple years and then pursue a potentially less lucrative field? You may want to pay off your loans before you start earning less.

If you’re not 100% sure whether the Big Law life is for you, try it for a year before doing something like refinancing, because once you lose benefits like income-driven repayment, you can’t get them back.

How much would refinancing save you?

This article originally appeared on NerdWallet