The pandemic has cracked open the labour market for corporate lawyers in Canada.
A war for talent amid soaring workloads is pushing up pay for early-career associates at Canada’s largest Bay Street firms, some of whom are opting to take jobs in the United States for higher salaries, while others are leaving the legal field completely for lucrative careers that demand less of their time.
In the past year, several law firms have hiked pay for junior lawyers. According to the National Association for Law Placement (NALP), several Canadian corporate law firms have increased annual salaries for first-year associates in their Toronto offices from the once-standard $110,000 to $130,000, including Osler, Hoskin & Harcourt LLP and Cassels Brock & Blackwell LLP.
“The salary increase reflects our appreciation of associates’ work and contribution to the firm’s ongoing success,” said Peter Wismath, chief marketing officer at Cassels.
According to NALP, the highest first-year salaries are at Davies Ward Phillips & Vineberg LLP, which pays first-year Toronto associates $160,000. The firm would not comment on its compensation practices, except to say that its pay is competitive.
Recent grads are still moving on despite the pay increases. Some cite feeling that they are replaceable and have sought more rewarding work. Others say the allure of becoming a partner has dulled, especially when some young lawyers feel that senior managers don’t often hear their calls for change. But partners on Bay Street say they believe their firms have a lot to offer to younger lawyers, and that better compensation is part of improving the workplace experience.
Tim Haney, the chief executive of Dentons Canada, said his firm has worked with its junior talent to adjust to the market. According to NALP, his firm pays $130,000 to first-year associates.
“Compensation packages need to evolve with the changes in the labour market,” he said in an interview. “So we spent a lot of time interacting with our people understanding what’s important to them. … I think it really resonates with the people because they feel like they’re a stakeholder in creating that package we talked about.”
While lawyers are happy to earn more, some say a pay bump isn’t enough.
Nigel Masenda left Toronto after completing his articles at Stikeman Elliott LLP. Last year, he relocated to Los Angeles, where he now works for Greenberg Traurig LLP in its corporate practice.
Mr. Masenda, who graduated from law school in 2020, said he is one of many young lawyers who have left Canada for the United States. Firms south of the border, he said, respect Canadian law schools, and are happy to poach new grads and offer double what an associate could make on Bay Street.
“Even when we do see the incremental pay bump in the Toronto Canadian market, it’s not at the level that you’re seeing in the U.S.,” he said. He added that the cost of Canadian real estate, among other things, has increased faster than salaries, making it difficult for early-career lawyers – often saddled with debt – to establish roots. Mr. Masenda said he has seen young lawyers head to cheaper U.S. cities such as Nashville and Charlotte, N.C.
But dollars and cents aren’t everything. Aaron Baer, a partner and director of training at Renno & Co., a Toronto-based law firm, gets a lot of face time with early-career lawyers. In May, he co-founded 4L Academy, a program that teaches new corporate lawyers practical skills they didn’t learn in law school. He says a lack of fulfilment is driving dissatisfaction and attrition at law firms.
“I think there’s been a big start of a realization by firms that that there’s a gap between what their younger associates are looking for and what the firms are offering,” he said. “Money is not their No. 1 driver. And I think for a lot of the boomer partners and maybe the Gen X partners it was. ... And so their natural reaction, in a lot of cases, is to throw money at the problem, and money is also the easiest thing to throw at the problem, because these firms are making a lot of money right now.”
Mr. Baer said the pandemic has amplified pre-existing issues for newcomers to corporate law: Workloads have intensified, mentorship is harder to come by, and a sense of belonging can dissipate – or never form – in a world of remote work.
“I think the biggest piece to fulfilment is understanding why you’re doing things,” Mr. Baer said. As an associate, he said, he was “very busy at times, but I didn’t understand how my role fit into the bigger picture, how I was helping what we were doing, why we were doing it. And then you just really feel like a cog in a machine.”
Mr. Masenda agrees. He and Mr. Baer said they have noticed more young associates leaving law firms in search of deeper fulfilment, better work-life balance and, sometimes, higher pay. Whether it’s shifting to an in-house role at a tech company or to management consulting, both have seen an uptick in attrition, with lawyers applying their skills to different fields.
“I think that’s the new perspective on work-life balance: It’s no longer just having less hours that you’re working, but what is it that you’re doing with those working hours,” Mr. Masenda said.
Mr. Haney of Dentons said he hasn’t noticed more churn in the industry, but that the topic is discussed more than it used to be. He said law firms are responding to the shifting landscape.
“I think, historically, law firms tried to have one path for every single person coming out of law school, and I think we’ve recognized … that you have to look at them and provide flexibility,” he said. “It’s not just doing great technical legal work, it’s opportunities with clients, secondments, engaging [them in the] culture early in their career.”
Jeffrey Singer, the chair of Stikeman Elliott, said Bay Street provides great opportunities for early-career lawyers, even with higher pay south of the border.
“The opportunity of big law in Canada is far more than financial,” he said. “It is probably the fastest path to the front-row seats at the most complex and exciting matters.
“Our associates would typically have much broader exposure to all facets of deals and liaise directly with C-suites than they would elsewhere.”
Mr. Singer said it’s normal for Canadian corporate lawyers to explore other opportunities, and many return.
“For those with a mid- to long-term outlook, the opportunity at a Canadian corporate law firm is almost impossible to replicate,” he said.
For most corporate lawyers, the end goal is to be made a partner, which allows them to buy an ownership stake and be paid a share of the firm’s profits. Some partners at large Bay Street firms earn more than $1-million a year.
That status also brings prestige and influence, but Mr. Baer said partnership is not always appealing. He became a partner at Aird & Berlis LLP in his late 20s, but almost turned the offer down.
“I didn’t think it really made sense for me,” he said. “What does my lifestyle look like at that point? Sure I’ll be making more money, but am I going to be happy, am I going to be fulfilled?”
He said other lawyers are asking themselves the same question.
“I’ve talked to many people in the past month, year, that have turned down partnership because they’re going, ‘I’m not sure I want this, there’s added pressure to bring in work now,’ and all these things.
“They’re leaving their options open.”
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