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<p>And to be clear, even if we assume that associate salaries must move in lockstep (which I would dispute), that doesn’t answer the question of why the lockstep increments must be only $10-15k. Why not have brand-new associates be paid, say, $80k (or whatever salary is commensurate with the revenue they generate), and then have large lock-step increments of, say, $30k, for each additional year until the 4th year, after which the step increments can be reduced to $10-15k? </p>
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<p>So let them. What’s wrong with that? If they want to jump to a competitor who is willing to overpay for them, fine, let them. As we’ve all agreed, those new associates aren’t profitable at high salaries anyway. If a competitor firm wants to waste money, that doesn’t mean that I should do likewise, just like if my friends jump off a bridge doesn’t mean that I should too. After the 4th year, upon which those associates’ productivity can now justify their costs, then I raid my competitors by offering comparable salaries. But until that time, wouldn’t it be economically rational to stick my competitors with the unprofitable ‘training cost’ of the first 3 years of associate work, rather than paying for it myself? </p>
<p>Of course that all presumes that law firms are indeed behaving economically rationally. If we lift that assumption, then we can examine social and psychological explanations which is where I suspect the answer lies.</p>