Salary & Economic Survey

Transcription

1 2015 Salary & Economic Survey

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3 Iowa State Bar Association 2015 Salary & Economic Survey Purpose... 1 CONTENTS Method... 3 About Readex... 5 Findings Compensation... 8 Benefits About Their Employers About Their Work About Their Educational Debt Opinions of the Legal Profession Personal Profile Data Tables Appendix 2015 Readex Research

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5 Iowa State Bar Association 2015 Salary & Economic Survey The findings cited in this report are based on a survey sponsored by the Iowa State Bar Association (ISBA). PURPOSE Through the use of an online survey representing the ISBA s able active attorney members (excluding members residing outside of Iowa and those holding a retirement certificate), the primary goals of this research project were to: better understand the demographics of the ISBA membership document general trends in attorneys economic compensation understand how attorneys compensation (e.g., salary, benefits) is impacted by various factors (e.g., gender, age, race/ethnicity, years in practice) collect thorough, accurate information on the economic realities associated with the career field to share with potential future attorneys (e.g., law school debt, opinions of the field) create a point of reference for future economic surveys of the ISBA membership 1

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7 Iowa State Bar Association 2015 Salary & Economic Survey The survey sample of 5,688 represented able active attorney members of the ISBA, excluding members residing outside of Iowa and/or those holding a retirement certificate. The sample represented 70% of the ISBA s entire membership of 8,108 at the time of sample selection. METHOD Data was collected via online survey from April 22 to May 5, The survey was closed for tabulation with 928 usable responses a 16% response rate. To best represent the audience of interest, results from the 850 respondents who indicated on the first survey question that they are currently employed as attorneys in Iowa were tabulated for analysis in this report. As with any research, the results should be interpreted with the potential of non-response bias in mind. It is unknown how those who responded to the survey may be different from those who did not respond. In general, the higher the response rate, the lower the probability of estimation errors due to non-response and thus, the more stable the results. The margin of error for percentages based on 850 tabulated responses is ±3.1 percentage points at the 95% confidence level. The margin of error for percentages based on smaller sample sizes will be larger. (Please refer to the Appendix for details of the survey method.) 3

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9 Iowa State Bar Association 2015 Salary & Economic Survey Readex Research is a nationally recognized independent research company located in Stillwater, Minnesota. Its roots are in survey research for the magazine publishing industry, but specialization in conducting high-quality survey research (by mail and/or the Internet) has brought clients from many other markets, including associations, corporate marketers and communicators, and government agencies. Since its founding in 1947, Readex has completed thousands of surveys for a lengthy and diverse list of clients. ABOUT READEX As a full-service survey research supplier, Readex provides in-house processing of all phases of each project (traditional mailing, broadcast ing, and data processing) to ensure complete control over project quality and schedule. Analytical capabilities include a range of multivariate statistics and modeling techniques, in addition to the more traditional stub-and-banner tabulations. This survey was conducted and this report was prepared by Readex in accordance with accepted research standards and practices. 5

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11 Iowa State Bar Association 2015 Salary & Economic Survey FINDINGS 7

12 Employment Status Of the 928 individuals who responded to the survey, 850 (or 92% of the total number of respondents) are currently employed as attorneys in Iowa. Tabulated for analysis in this report, they are hereafter referred to as Iowa attorneys. The remaining individuals (those who indicated on the first survey question that they are retired, unemployed, employed as an attorney outside of Iowa, or employed as something other than an attorney) did not participate in the remainder of the survey. Employment Status: All Respondents full-time 87% part-time 5% retired 1% unemployed 1% employed as an attorney outside of Iowa 3% employed, but not as an attorney 4% Did not participate in the remainder of the survey base: all 928 respondents Of the 850 tabulated Iowa attorneys, 94% are employed full time. 8

13 Iowa State Bar Association 2015 Salary & Economic Survey Employment Status (Among Attorneys Practicing in Iowa) What best describes your current employment status as an attorney in Iowa? FINDINGS Compensation part-time 6% full-time 94% base: 850 attorneys practicing in Iowa 9

14 Base Salary Compensation results in this report are based on full-time Iowa attorneys only (excluding part-time Iowa attorneys whose compensation would likely skew the results). The median 1 annual base salary for this group as of January 1, 2015 was $86, A median is considered the typical response. It is the value that lies at the middle of a distribution: that is, 50% of the values are above it and 50% are below. Unlike the mean, it is not influenced by extreme values. 10

15 Iowa State Bar Association 2015 Salary & Economic Survey Base Salary As of January 1, 2015, what was your annual base salary (in US dollars)? FINDINGS Compensation median: $86,300 21% 20% 13% 16% 8% 2% 9% 4% 7% no answer* nothing <$50,000 $50,000 - $74,999 $75,000 - $99,999 $100,000 - $149,999 $150,000 - $199,999 $200,000 - $249,999 $250,000+ base: 803 attorneys practicing in Iowa full time (fill-in answers) *Excluded from median calculation. 11

16 Base Salary As might be expected, the median base salary tends to correlate positively with the number of years an individual has been licensed to practice law. The typical full-time Iowa attorney who has been licensed for fewer than 5 years reported an annual base salary of $60,000 ($26,300 below the median of all fulltime Iowa attorneys). The typical full-time Iowa attorney who has been licensed for 15 years or more earned at least $22,700 above the median of all full-time Iowa attorneys. The typical full-time male Iowa attorney reported an annual salary of $97,500; the typical full-time female Iowa attorney reported an annual salary of $75,000. The significant disparity between salaries may be attributed, at least in part, to certain professional demographics for example, the typical male Iowa attorney has been licensed to practice law for 24 years, compared with only 9 years for the typical female. As documented, the number of years licensed tends to correlate positively with higher reported salaries. Base Salary by Gender: Median Summary (thousands) ALL FULL-TIME IOWA ATTORNEYS $86.3 male $97.5 female $75.0 base: 803 attorneys practicing in Iowa full time; those in each segment (fill-in answers) 12

17 Iowa State Bar Association 2015 Salary & Economic Survey Base Salary by Number of Years Licensed As of January 1, 2015, what was your annual base salary (in US dollars)? FINDINGS Compensation median (thousands) ALL FULL-TIME $86.3 # OF YEARS LICENSED <5 $ $85.0 $ $120.0 $110.0 $125.0 $109.0 base: 803 attorneys practicing in Iowa full time; those in each segment (fill-in answers) 13

18 Base Salary Primary practice area appears to have a significant impact on annual salary. Full-time Iowa attorneys whose primary practice is in defense civil/litigation earn the highest median annual salary $106,300. Reporting the lowest annual median salary at $50,000 (and a difference of $56,300 compared with the highest) are full-time Iowa attorneys whose primary practice is in criminal defense/owi/traffic. 14

19 Iowa State Bar Association 2015 Salary & Economic Survey Base Salary by Primary Practice Area As of January 1, 2015, what was your annual base salary (in US dollars)? FINDINGS Compensation median (thousands) ALL FULL-TIME $86.3 PRIMARY PRACTICE AREA litigation/civil: defense estate planning/probate litigation/civil: plaintiff real estate $106.3 $97.3 $90.0 $85.0 general practice family/juvenile $68.8 $65.5 criminal defense/owi/traffic $50.0 base: 803 attorneys practicing in Iowa full time; those in each segment (fill-in answers) 15

20 Base Salary Results suggest that the location of one s principal office also plays a significant role in annual salary. Full-time Iowa attorneys whose primary offices are located in Judicial Election District 5A or 5B reported the highest median annual salary at $100,000; the lowest is seen in Judicial Election District 4 at a median of $58,

21 Iowa State Bar Association 2015 Salary & Economic Survey Base Salary by Judicial Election District As of January 1, 2015, what was your annual base salary (in US dollars)? FINDINGS Compensation median (thousands) ALL FULL-TIME $86.3 JUDICIAL DISTRICT 1A/1B 2A/2B 3A/3B $78.3 $85.0 $ $58.0 5A/5B 5C 6 7 8A/8B $100.0 $91.0 $88.6 $80.0 $68.0 base: 803 attorneys practicing in Iowa full time; those in each segment (fill-in answers) 17

22 Change in Base Salary Compared with one year previous, only 6% of full-time Iowa attorneys reported a decrease in their base salary as of January 1, % reported an increase, and 37% no change. As a result, the typical base salary reportedly did not change at all over the prior year. However, the average (mean) change was an increase of 3.4%. Because they couldn t compare, those who were not in the same position one year ago were not included in the calculations. 18

23 Iowa State Bar Association 2015 Salary & Economic Survey Change in Base Salary Compared to one year previous, how has that base salary changed? FINDINGS Compensation INCREASED: 43% by 10% or more 13% by 5% - 9% 10% by less than 5% 18% % not specified NO CHANGE DECREASED 2% 6% 37% mean: +3.4% median: 0% by less than 5% 0% by 5% - 9% 1% by 10% or more 5% % not specified 0% not comparable/no answer* 14% base: 803 attorneys practicing in Iowa full time (fill-in answers) *Excluded from the median calculation. 19

24 Other Cash Compensation About half (55%) of full-time Iowa attorneys were eligible to receive other cash compensation beyond a base salary in the 12 months prior to January 1, 2015, most commonly bonuses (35%). Other Cash Compensation Eligible To Receive bonuses 35% profit sharing 18% education reimbursement 10% commission or incentive pay 7% stock options 3% other 10% AT LEAST ONE 55% base: 803 attorneys practicing in Iowa full time (multiple answers) 43% of full-time Iowa attorneys received cash compensation (other than base salary) in the 12 months prior to January 1, Among those who did, the median value received was $27,100. The amount of additional cash compensation received tends to correlate positively with the number of years licensed. For example, those with fewer than 5 years of licensure typically earned $5,000, compared with those with 40 or more years of licensure at $49,000. Full-time Iowa attorneys whose primary practice area is in plaintiff litigation/civil and who received other cash compensation in the 12 months prior to January 1, 2015 typically received $62,500 in additional cash compensation more than 8 times the amount that those in criminal defense/owi/traffic typically received ($7,500). 20

25 Iowa State Bar Association 2015 Salary & Economic Survey Other Cash Compensation (Among Those Receiving) by Number of Years Licensed and Primary Practice Area In the 12 months prior to January 1, 2015, approximately what was the total value (in US dollars) of all other cash compensation (besides base salary) you received? FINDINGS Compensation NUMBER OF YEARS LICENSED TOTAL < median (thousands) $27.1 $5.0 $18.0 $20.0 $50.0 $72.0 $50.0 $49.0 PRIMARY PRACTICE AREA TOTAL criminal/ OWI/ traffic litigation/ civil: defense family/ juvenile estate planning/ probate general practice real estate litigation/ civil: plaintiff median (thousands) $27.1 $7.5 $14.0 $19.8 $33.5 $40.0 $47.0 $62.5 =$10 - $39.9 =$40 - $59.9 =$60+ base: 342 attorneys practicing in Iowa full time receiving other cash compensation; those in each segment (fill-in answers) *NOTE: Among all full-time Iowa attorneys (not only among the 43% who received cash compensation), the median cash compensation earned in the 12 months prior was $0; the mean was $31,

26 Satisfaction with Total Compensation Half (50%) of full-time Iowa attorneys are satisfied with their total compensation (providing a rating of 4 or 5 on a 5-point scale where 5=very satisfied and 1=not at all satisfied). The average rating of 3.4 falls slightly above the scale s midpoint of 3.0. Satisfaction with Total Compensation 5 - very satisfied 17% 4 33% 3 30% 2 12% 1 - not at all satisfied 7% mean rating 3.4 base: 803 attorneys practicing in Iowa full time Licensure tenure factors into full-time Iowa attorneys satisfaction with total compensation. Those who have been licensed to practice law for 30 or more years provided an average satisfaction rating of 3.7. That rating drops to 3.1 among those who have been licensed for fewer than 5 years. Primary practice area also plays a role in satisfaction ranging from the lowest average rating of 2.7 among full-time Iowa attorneys whose primary practice area is in criminal defense/owi/traffic up to 3.7 among those in estate planning/probate. 22

27 Iowa State Bar Association 2015 Salary & Economic Survey Satisfaction with Total Compensation by Number of Years Licensed and Primary Practice Area How satisfied are you with your total compensation (including base salary and any additional benefits)? FINDINGS Compensation NUMBER OF YEARS LICENSED TOTAL < mean rating PRIMARY PRACTICE AREA TOTAL criminal/ OWI/ traffic general practice family/ juvenile real estate litigation/ civil: plaintiff litigation/ civil: defense estate planning/ probate mean rating = = =3.6+ base: 803 attorneys practicing in Iowa full time; those in each segment *Mean ratings based on a 5-point scale where 5=very satisfied and 1=not at all satisfied. 23

28 Other Amenities/Benefits Offered Iowa attorneys are offered a variety of amenities/benefits by their law firms or employers. Coverage of bar dues (76%), CLE budget/reimbursement (68%) and/or attorney registration fees (68%) are among the most commonly offered. More than half are offered health insurance (60%), paid vacation time (56%), malpractice insurance (55%), retirement plan contributions (52%), and/or professional association dues (52%). 24

29 Iowa State Bar Association 2015 Salary & Economic Survey Other Amenities/Benefits Offered Which of the following other amenities/benefits does your law firm or employer offer (whether you make use of them or not)? FINDINGS Benefits bar dues 76% profit sharing 19% CLE budget/reimbursement 68% parking cost reductions 18% attorney registration fees 68% deferred compensation 17% insurance: health 60% civic/club dues 17% paid vacation time 56% client development budget 15% insurance: malpractice 55% employee assistance program 13% retirement plan contributions 52% gym membership discounts/on-site gym 13% professional association dues 52% car allowance 6% sick leave 48% moving expenses 6% mileage/transport. discounts/reimb. 47% company car 6% insurance: dental 41% further education financing 6% insurance: life 39% paid physical examination 6% laptop/tablet 39% country/recreational club membership 5% cell phone 38% thrift/savings plan 4% insurance: disability 36% stock options 3% remote access/work from home 35% child care/back up child care 1% maternity/paternity/adoption/new child leave 26% spouse travel expenses 1% funding/time off for prof. development 24% childcare allowance 1% flex-time 22% NET: insurance 73% use of organization credit card 21% OFFERS AT LEAST ONE OF THESE 89% base: 850 attorneys practicing in Iowa (multiple answers) 25

30 Number of Bar Association Dues That Would Be Paid and Payer of ISBA Dues 59% of Iowa attorneys indicated their employer pays their ISBA dues, while 36% pay their own dues. For 5%, dues are paid in part by their employers and in part by themselves. Payer of ISBA Dues employer 59% self 36% both 5% base: 850 attorneys practicing in Iowa A majority of Iowa attorneys whose law firms or organizations offer to pay bar dues are allowed to select association(s) of their choosing (84%). 26

31 Iowa State Bar Association 2015 Salary & Economic Survey Number of Bar Association Dues That Would Be Paid For how many bar associations will your law firm or organization pay dues (whether or not you utilize this benefit)? FINDINGS Benefits 1 of my choosing 22% 2 of my choosing 22% more than 2 of my choosing 40% 1 of my law firm's/ organization's choosing 2 of my law firm's/ organization's choosing more than 2 of my law firm's/ organization's choosing 4% 3% 4% base: 645 attorneys at law firms or organizations in Iowa that offer to pay bar dues 27

32 Retirement Plan Contributions Made About half (48%) of Iowa attorneys whose law firms or organizations offer retirement plan contributions indicated their contributions are matched, up to a maximum amount. For two in five (42%), their organizations or law firms contribute a set percentage of their salaries each year. 28

33 Iowa State Bar Association 2015 Salary & Economic Survey Retirement Plan Contributions Made How are your law firm's or organization's retirement plan contributions made? FINDINGS Benefits matches my contributions, up to a maximum amount 48% contributes a set percentage of my salary each year 42% contributes a set dollar amount each year 5% matches my contributions, with no maximum amount 2% base: 446 attorneys at law firms or organizations in Iowa that offer to make retirement plan contributions 29

34 Holidays Observed and Number of Vacation Days Planning to Take in 2015 Virtually all (96%) full-time Iowa attorneys plan to take at least one vacation day in 2015; the typical full-time Iowa attorney plans to take 12. Number of Vacation Days Planning to Take in or more 14% % % % fewer than 5 8% none 3% mean median 11.7 days 12 days base: 803 attorneys practicing in Iowa full time 97% of Iowa attorneys indicated their law firms or organizations observe at least one holiday annually. Virtually all observe Christmas Day (97%), Thanksgiving Day (96%), and/or New Year s Day (96%). About nine in ten observe Independence Day (90%), Labor Day (86%), and/or Memorial Day (86%). 30

35 Iowa State Bar Association 2015 Salary & Economic Survey Holidays Observed What holidays does your law firm or organization observe annually? FINDINGS Benefits Christmas Day Thanksgiving Day New Year's Day Independence Day Labor Day Memorial Day Day after Thanksgiving Christmas Eve New Year's Eve Martin Luther King's Birthday Veterans Day Presidents' Day other OBSERVES AT LEAST ONE 19% 16% 12% 7% 36% 56% 97% 96% 96% 90% 86% 86% 76% 97% base: 850 attorneys practicing in Iowa (multiple answers) 31

36 Judicial Election District and Population of Community The highest concentrations of Iowa attorneys indicated their principal offices are located in Judicial Election District 5C (26%) or 6 (17%). No other Judicial Election District is home to more than 8% of Iowa attorneys principal offices. Judicial Election District 1A 5% 5B 3% 1B 3% 5C 26% 2A 4% 6 17% 2B 8% 7 5% 3A 4% 8A 3% 3B 5% 8B 2% 4 4% 5A 8% out of state 1% base: 850 attorneys practicing in Iowa Half (51%) of Iowa attorneys indicated their principal offices are located in communities with a population of 100,000 or more. On the other end of the spectrum, one in ten (9%) are in communities of fewer than 4,

37 Iowa State Bar Association 2015 Salary & Economic Survey Population of Community What is the population of the community in which your principal office is located? FINDINGS About Their Employers 51% 9% 6% 13% 8% 12% fewer than 4,000 4,000-6,999 7,000-24,999 25,000-59,999 60,000-99, ,000 or more base: 850 attorneys practicing in Iowa 33

38 Proportion Who Work in a Private Law Practice and Number of Attorneys at Entire Firm Three in four Iowa attorneys (77%) work in a private law practice. Those who have held their licenses to practice law the longest are more likely than others to work in private practices 92% of those who have been licensed for 40 years or more do so. Proportion Who Work in a Private Law Practice by Number of Years Licensed ALL IOWA ATTORNEYS 77% # of years licensed fewer than 5 76% % % % % % 40 or more 92% base: 850 attorneys practicing in Iowa The typical Iowa attorney at a private law practice indicated there are 4 attorneys (including themselves) practicing at their entire firm, across all locations. The average is much higher at 12.8, influenced by some high reports. Nearly one-fourth (23%) of Iowa attorneys at private law practices are solo practitioners at their firms. 34

39 Iowa State Bar Association 2015 Salary & Economic Survey Number of Attorneys at Entire Firm Including yourself, how many attorneys practice at your entire firm, across all locations? FINDINGS About Their Employers mean: 12.8 attorneys median: 4 attorneys 23% 21% 15% 11% 12% 11% 6% 1% 1 (solo practitioner) or more base: 653 attorneys at private law practices in Iowa 35

40 Personnel Employed and Outside Services Contracted by Law Firm 93% of Iowa attorneys at private law practices indicated their law firm employs at least one of ten listed types of non-attorney personnel. About half or more employ legal assistants/paralegals (70%), secretaries (65%), receptionists (61%), bookkeepers (53%), and/or office managers/administrators (48%). A strong majority (88%) of Iowa attorneys at private law practices reported their law firms do not contract for attorney, research, or secretarial services outside of their firms. Outside Services Contracted attorney 5% research 4% secretarial 2% NONE OF THESE SERVICES 88% base: 653 attorneys at private law practices in Iowa (multiple answers) 36

41 Iowa State Bar Association 2015 Salary & Economic Survey Personnel Employed by Law Firm Which of the following personnel does your law firm employ? FINDINGS About Their Employers legal assistant/paralegal secretary receptionist bookkeeper office manager/administrator 70% 65% 61% 53% 48% law clerk information technology (IT) 26% 21% secretarial supervisor in-house process server in-house investigator 1% 1% 9% EMPLOYS AT LEAST ONE OF THESE 93% base: 653 attorneys at private law practices in Iowa (multiple answers) 37

42 Compensation Method for Associates Three-fifths (63%) of Iowa attorneys at private law practices indicated their law firms have associates. Proportion Whose Law Firms Have Associates have associates 63% base: 653 attorneys at private law practices in Iowa Among those who do, they most commonly reported the usual method of compensation provided to their associates is through salary plus a possible year-end bonus (52%). 38

43 Iowa State Bar Association 2015 Salary & Economic Survey Compensation Method for Associates (Among Those Whose Law Firms Have Associates) If your law firm has associates, what is the usual method of compensation provided to associates? FINDINGS About Their Employers salary, plus possible year-end bonus 52% salary only 25% salary, plus percentage of fee personally generated 21% salary, plus percentage of firm's revenue 1% base: 412 attorneys at private law practices in Iowa who have associates 39

44 Compensation Offered to Law School Students and Graduates The typical Iowa attorney at a private law practice that offers hourly compensation to law school students reported the typical hourly compensation offered is $ One in three (36%) said their firms do not offer hourly compensation to law school students, and 27% indicated they didn t know the pay rate offered by their firms. The number of attorneys at a law firm appears to have an impact on the pay rate offered to law school students. Among those whose law firms offer hourly compensation to law school students, the highest median rates typically offered are found in the largest firms. The typical Iowa attorney at a private law practice indicated their law firm typically offers a starting annual salary of $52,600 to law school graduates. It should be noted that 29% did not know the starting salary offered by their firms. Again, the number of attorneys at a law firm appears to have an influence on compensation offered. Median beginning salaries tend to trend upwards as size of the law firm increases. 40

45 Iowa State Bar Association 2015 Salary & Economic Survey Hourly Compensation Offered to Law School Students and Starting Annual Salary Offered to Law School Graduates by Number of Attorneys at Firm What is the typical hourly compensation rate offered to law school students for employment at your law firm? What is the typical starting annual salary offered to law school graduates for employment at your law firm? FINDINGS About Their Employers NUMBER OF ATTORNEYS AT FIRM TOTAL 1 (solo) median hourly rate for law school students (among those offering) median starting annual salary for law school graduates (thousands) $19.75 $19.66 $16.78 $16.54 $18.80 $18.15 $26.15 $40.00 $52.6 $40.0 $43.8 $46.9 $51.7 $58.3 $75.0 $80.0 base: attorneys at private law practices in Iowa that offer hourly compensation to law school students answering; attorneys at private law practices in Iowa answering 41

46 Starting Annual Salaries Offered Iowa attorneys reported a median starting salary typically offered by their law firms or organizatiosn to paralegals/legal assistants without prior experience of $30,000. They reported the starting salary typically offered rises to a median of $37,500 for paralegals/legal assistants with at least 5 years of experience. Iowa attorneys reported a median starting salary typically offered by their law firms or organizations to secretaries without prior experience of $25,000. They reported the starting salary typically offered rises to a median of $30,000 for secretaries with at least 5 years of experience. It should be noted that about two-thirds of Iowa attorneys were unable to answer these questions. 42

47 Iowa State Bar Association 2015 Salary & Economic Survey Starting Annual Salaries Offered What is the typical starting annual salary offered to each of the following for employment at your law firm or organization? FINDINGS About Their Employers median (thousands) PARALEGALS/LEGAL ASSISTANTS no prior experience $30.0 at least 5 years of experience $37.5 SECRETARIES no prior experience $25.0 at least 5 years of experience $30.0 base: attorneys practicing in Iowa answering (fill-in answers) 43

48 Proportion With Plans to Hire an Attorney One in three Iowa attorneys (32%) reported their law firms or organizations plan to hire an attorney in the 12 months. 44% indicated their law firms or organizations do not plan to, and another 23% did not know. 44

49 Iowa State Bar Association 2015 Salary & Economic Survey Proportion with Plans to Hire an Attorney Does your law firm or organization plan to hire an attorney in the next 12 months? FINDINGS About Their Employers yes 32% no 44% don't know 23% base: 850 attorneys practicing in Iowa 45

50 Average Hourly Overhead Expense Per Attorney and Percentage of Gross Revenues Spent on Overhead The typical Iowa attorney at a private law practice indicated that the average hourly overhead expense per attorney for each hour billed at their law firm is $75.00, and that 43.2% of their law firm s gross revenue is spent on overhead. Average Hourly Overhead Expense Per Attorney $100 or more 8% $80 - $99 9% $60 - $79 12% less than $60 11% mean $80.70* median $75.00 don't know** 59% base: 653 attorneys at private law practices in Iowa *Due to the significant proportion of respondents answering in the bottom category, the sample statistic may overstate the true population mean. **Excluded from mean and median calculations. 46

51 Iowa State Bar Association 2015 Salary & Economic Survey Percentage of Gross Revenues Spent on Overhead What percentage of your law firm's gross revenue is spent on overhead? FINDINGS About Their Employers 39% mean: 43.2% median: 44% 18% 12% 12% 7% 7% 5% don't know* less than 25% 25% - 34% 35% - 44% 45% - 54% 55% - 64% 65% or more base: 653 attorneys at private law practices in Iowa *Excluded from mean and median calculations. 47

52 Number of Years Practicing Law Two in five Iowa attorneys (38%) are fairly new to the field, having been licensed to practice law for fewer than 10 years. On the other end of the spectrum, 45% are veteran attorneys, having been licensed to practice law for 20 years or more. The typical attorney has been licensed to practice law for 17 years. 48

53 Iowa State Bar Association 2015 Salary & Economic Survey Number of Years Practicing Law For how many years have you been licensed to practice law? FINDINGS About Their Work mean: 19.2* years median: 17 years 24% 14% 17% 20% 9% 7% 8% fewer than or more base: 850 attorneys practicing in Iowa *Due to the significant proportion of respondents answering in the bottom category, the sample statistic may overstate the true population mean. 49

54 Hours Devoted Weekly to Practicing Law and Reasons for Not Working Full Time The typical Iowa attorney devotes 47 hours per week to practicing law. More than one in three (36%) reported spending 50 hours or more per week. Hours Devoted Weekly to Practicing Law 60 or more 8% % % % % fewer than 20 3% mean median base: 850 attorneys practicing in Iowa 47.1 hours 47 hours Among Iowa attorneys who work part time, the main reasons for not currently working full time are that they are approaching retirement/semi-retired (43%), for family/personal reasons (38%), and/or due to other business/activities (26%). Whether a new or experienced attorney, very few indicated a reason they are not working full time is that opportunities are not available. 50

55 Iowa State Bar Association 2015 Salary & Economic Survey Reasons for Not Working Full Time For what reason(s) do you not currently work full time? FINDINGS About Their Work approaching retirement/ semi-retired 43% family/personal reasons 38% other business/activities 26% economic necessity/reality 9% full-time opportunity not available: new attorney 9% full-time opportunity not available: experienced attorney 2% other 11% base: 47 attorneys practicing in Iowa part time (multiple answers) 51

56 Proportion Who Are Self-Employed 42% of Iowa attorneys are self-employed. Perhaps not surprisingly, the percentage of Iowa attorneys who are self-employed is lowest among those who have been licensed to practice law for less than 5 years (dropping to 15%) and tends to correlate positively with license tenure. Among those with at least 30 years of license tenure, the proportion of self-employed attorneys reaches about two-thirds. 52

57 Iowa State Bar Association 2015 Salary & Economic Survey Proportion Who Are Self-Employed by Number of Years Licensed Are you a self-employed attorney? Do you currently work in a private law practice? FINDINGS About Their Work ALL IOWA ATTORNEYS 42% # of years licensed <5 15% % % % % % 64% base: 850 attorneys practicing in Iowa 53

58 Primary Classification Among Iowa attorneys at private law practices, the most common primary practice classifications are equity partner/shareholder (36%), associate (25%), or sole practitioner (working outside of home) (20%). No more than 9% identified any other one classification. 54

59 Iowa State Bar Association 2015 Salary & Economic Survey Primary Classification (Among Those at Private Law Practices in Iowa) What is your primary classification? FINDINGS About Their Work equity partner/shareholder 36% associate 25% sole practitioner: outside of home 20% managing partner 9% sole practitioner: from home office 3% non-equity partner 2% of counsel 2% senior associate 1% other 1% base: 653 attorneys at private law practices in Iowa 55

60 Primary Classification Among Iowa attorneys not at private law practices, the most common primary practice classification is in-house/corporate counsel (for profit) (33%). No other primary practice classification was selected by more than 12%. 56

61 Iowa State Bar Association 2015 Salary & Economic Survey Primary Classification (Among Those Not at Private Law Practices in Iowa) What is your primary practice classification? FINDINGS About Their Work in-house/corporate counsel: for profit state agency in-house/corporate counsel: not for profit legal services attorney county prosecutor law clerk judge: state county assistant prosecutor city agency public defender administrative law judge/referee lobbyist/trade association/gov. relations academia/professor management/non-legal other* 6% 6% 6% 6% 5% 5% 4% 3% 3% 3% 2% 2% 7% 12% 33% base: 197 attorneys not at private law practices in Iowa *Other includes those who indicated their primary classification is county agency, non-clerk attorney in a court system, or other federal agency (each selected by 1%), or something other than the classifications listed (4%). 57

62 Practice Areas Iowa attorneys practice in a wide variety of areas. About two in five practice in real estate (45%), estate planning/probate (41%), and/or general practice (39%). About a third practice in family/juvenile (34%), plaintiff litigation/civil practice (32%), and/or corporate areas (31%). The typical Iowa attorney practices in 4 areas. Practice Areas: Count Summary 10 or more 12% % % % 1 14% mean median 5.1 areas 4 areas base: 850 attorneys practicing in Iowa 58

63 Iowa State Bar Association 2015 Salary & Economic Survey Practice Areas In what areas do you practice? FINDINGS About Their Work real estate 45% construction 10% estate planning/probate 41% federal civil practice 10% general practice 39% banking 9% family/juvenile 34% alternative dispute resolution/mediation 8% litigation/civil practice: plaintiff 32% bankruptcy 7% corporate 31% education 6% litigation/civil practice: defense 28% criminal prosecution 6% criminal defense/owi/traffic 21% health care 5% taxation (federal, state, local) 20% intellectual property/trade regulation 4% labor/employment 20% environmental 3% administrative 19% public utilities 3% collections 17% human rights 3% agricultural 16% immigration 2% local government 15% international 1% insurance 15% antitrust/unfair competition 1% business/securities 14% elder 14% other 12% base: 850 attorneys practicing in Iowa (multiple answers) 59

64 Primary Practice Area Iowa attorneys primary practice areas vary greatly. 15% indicated their primary practice area is in general practice, followed by family/juvenile (12%), estate planning/probate (10%), and defense litigation/civil practice (10%). No other primary practice area was identified by more than 7%. 60

65 Iowa State Bar Association 2015 Salary & Economic Survey Primary Practice Area What do you consider to be your primary practice area? FINDINGS About Their Work general practice family/juvenile estate planning/probate litigation/civil practice: defense real estate litigation/civil practice: plaintiff criminal defense/owi/traffic labor/employment corporate local government insurance administrative criminal prosecution health care taxation (federal, state, local) business/securities other* base: 850 attorneys practicing in Iowa Top Mentions 15% 12% 10% 10% 7% 6% 4% 4% 4% 3% 3% 2% 2% 2% 2% 2% 11% *Other includes those who indicated their primary practice area is bankruptcy, agricultural, banking, education, immigration, collections, intellectual property/trade regulation, federal civil practice, construction, public utilities, alternative dispute resolution/mediation, environmental, human rights, or elder (each selected by 1% or fewer) or a practice other than those listed (4%). 61

66 Frequency of Practicing Limited Representation Two-fifths of Iowa attorneys at private law practices (44%) practice limited representation but most indicated they do so only sometimes. 62

67 Iowa State Bar Association 2015 Salary & Economic Survey Frequency of Practicing Limited Representation Rules of Professional Conduct and Rules of Civil Procedure allow for limited scope representation. How often do you practice limited representation? FINDINGS About Their Work always 2% usually 4% sometimes 38% never 55% base: 653 attorneys at private law practices in Iowa 63

68 Percentage of Income Derived from Court Appointed Juvenile/Indigent Defense Only 29% of Iowa attorneys at private law practices accept court appointed juvenile or indigent defense cases. Proportion of Those Who Accept Court Appointed Juvenile or Indigent Defense Cases accept cases 29% base: 653 attorneys at private law practices in Iowa Among those who do, 45% indicated that less than 10% of their income is derived from these cases, and the average percentage of income earned from court appointed juvenile or indigent defense cases is 26.1%. 64

69 Iowa State Bar Association 2015 Salary & Economic Survey Percentage of Income Derived From Court Appointed Juvenile/Indigent Cases (Among Those Who Accept These Cases) What percentage of your income is derived from court appointed juvenile or indigent defense cases? FINDINGS About Their Work 100% 80% - 99% 1% 6% mean: 26.1% median: 15% 60% - 79% 7% 40% - 59% 11% 20% - 39% 21% 10% - 19% 9% less than 10% 45% base: 192 attorneys at private law practices who accept court appointed juvenile or indigent defense cases 65

70 Typical Hourly Rate and Percentage Charged on a Contingency-Fee Basis The median hourly rate typically charged by Iowa attorneys at private law practices is $199. As could be expected, the median hourly rate tends to correlate positively with license tenure. Those at private law practices who have been licensed to practice law for fewer than 5 years typically charge an hourly rate of $170; the typical hourly rate rises to $225 among those who have been licensed for 40 years or more. By primary practice area, the highest median hourly rate typically charged, at $222, is found in those whose primary practice area is in plaintiff litigation/civil; the median drops to $179 among those primarily practicing in defense litigation/civil. The typical Iowa attorney at a private law practice who charges on a contingency-fee basis charges 35% in that way. 42% do not charge on a contingency-fee basis. Percentage Charged on a Contingency-Fee Basis 40% or more 2% 33% - 39% 35% 25% - 32% 12% less than 25% 9% mean 33.8% median 35% do not charge on a contingency-fee basis* 42% base: 653 attorneys at private law practices in Iowa *Excluded from mean and median calculations. 66

71 Iowa State Bar Association 2015 Salary & Economic Survey Typical Hourly Rate by Number of Years Licensed and Primary Practice Area What is your typical hourly rate? FINDINGS About Their Work NUMBER OF YEARS LICENSED TOTAL < median hourly rate $199 $170 $193 $208 $211 $221 $218 $225 PRIMARY PRACTICE AREA TOTAL litigation/ civil: defense criminal/ OWI/ traffic general practice family/ juvenile real estate estate planning/ probate litigation/ civil: plaintiff median hourly rate $199 $179 $180 $191 $200 $203 $209 $222 =$180 - $199 =$200 - $219 =$220+ base: 653 attorneys at private law practices in Iowa; those in each segment 67

72 Importance of Factors in Determining Fees Iowa attorneys at private law practices most commonly indicated the amount of time involved (73%) and/or their reputation, experience, and ability as an attorney (71%) to be important factors when determining fees. Far fewer (16%) feel that other clients not accepted due to conflict is an important factor when determining fees. 68

73 Iowa State Bar Association 2015 Salary & Economic Survey Importance of Factors When Determining Fees How important to you are each of the following factors when determining fees? FINDINGS About Their Work Important Summary* amount of time involved your reputation, experience, and ability as an attorney 73% 71% fees customarily changed in your area for similar work novelty/difficulty of the questions involved time limitations imposed by client/circumstance 49% 56% 61% results obtained 35% other clients not accepted due to conflict 16% base: 653 attorneys at private law practices in Iowa *Important defined as a rating of 4 or 5 on a 5-point scale where 5=very important and 1=not at all important. 69

74 Discussion of Fees with Clients Almost all Iowa attorneys at private law practices initiate the discussion of fees with clients as part of their regular policy (93%). Proportion Who Initiate Discussion of Fees with Clients initiate discussion of fees 93% base: 653 attorneys at private law practices in Iowa 57% of Iowa attorneys at private law practices indicated they always have a discussion of fees with their clients during the first interview. Another 33% usually do, and 8% do so only sometimes. Very few indicated they never have a discussion of fees during the first interview or that they only do so when the client initiates (1% each). 48% of Iowa attorneys at private law practices indicated they always provide their clients with written verification of fees and plans for payment. Another 28% usually do, and 17% do so only sometimes. Relatively few indicated they never provide their clients with written verification of fees and plans for payment, or that they only do so upon client request (2% and 3%, respectively). 70

75 Iowa State Bar Association 2015 Salary & Economic Survey Frequency of Discussing Fees During First Interview and Frequency of Providing Written Verification of Fees/Plans for Payment How often do you have a discussion of fees with your clients during the first interview? How often do you provide your clients with written verification of fees and plans for payment? FINDINGS About Their Work always 48% 57% usually 28% 33% sometimes 8% 17% never only when the client initiates discussion/requests written verification 1% 2% 1% 3% discuss fees during first interview provide written verification of fees/plans base: 653 attorneys at private law practices in Iowa 71

76 Billable Hours Iowa attorneys at private law practices most commonly track time spent on billable hours in 5-minute intervals (58%). The next most common interval used is 10 minutes (17%). Only 5% of Iowa attorneys at private law practices do not track their time. Interval Used to Track Time Spent on Billable Hours by the hour 1% 30 minutes 1% 15 minutes 8% 10 minutes 17% 5 minutes 58% by the minute 8% do not track time 5% base: 653 attorneys at private law practices in Iowa The typical Iowa attorney at a private law practice produces 6 billable hours of work in a typical day (whether or not they are directly billed). 72

77 Iowa State Bar Association 2015 Salary & Economic Survey Average Billable Hours Produced Daily On average, how many billable hours of work do you produce in a typical day (whether or not they are directly billed)? FINDINGS About Their Work mean: 5.9 hours median: 6 hours 21% 18% 23% 17% 12% 8% fewer than 4 4 up to 5 5 up to 6 6 up to 7 7 up to 8 8 or more base: 653 attorneys at private law practices in Iowa 73

78 Minimum Number of Annual Billable Hours Expected/Required One in three Iowa attorneys at private law practices (33%) indicated their law firm expects or requires a minimum number of annual billable hours. Proportion Who Have a Minimum Number of Annual Billable Hours Expected and/or Required by Law Firm have minimum requirement 33% base: 653 attorneys at private law practices in Iowa Among Iowa attorneys at private law practices who have a minimum expectation/requirement, the median number of annual billable hours expected or required (as set by their law firms) is 1,730 hours. 74

79 Iowa State Bar Association 2015 Salary & Economic Survey Minimum Number of Annual Billable Hours Expected/Required Among Those Who Have a Minimum Requirement What is the minimum number of billable hours per year expected and/or required by your law firm? FINDINGS About Their Work mean: 1,640 hours median: 1,730 hours 41% 24% 14% 14% 4% 2% fewer than 1,000 1,000 to 1,499 1,500 to 1,699 1,700 to 1,849 1,850 to 2,099 2,100 or more base: 214 attorneys at private law practices in Iowa who have a minimum requirement or expectation of annual billable hours 75

80 Frequency of Billing Clients A majority of Iowa attorneys at private law practices usually bill their clients on a monthly basis (60%). 76

81 Iowa State Bar Association 2015 Salary & Economic Survey Frequency of Billing Clients How often do you usually bill clients? FINDINGS About Their Work monthly 60% upon completion: end of month 18% irregularly/not scheduled 11% quarterly 5% upon completion: number of days 3% on retainer basis 1% base: 653 attorneys at private law practices in Iowa 77

82 Proportion of Fees Failed to Collect and Actions Taken When Fees Are Not Paid in Due Course The typical Iowa attorney at a private law practice fails to collect approximately 8% of their total fees billed to clients. Proportion of Fees Failed to Collect 30% or more 4% 20-29% 9% 10-19% 21% 5-9% 25% 1-4% 28% none 7% mean 10.4% median 8% base: 653 attorneys at private law practices in Iowa Three in four Iowa attorneys at private law practices (73%) take action when fees are charged but not paid in due course. Most commonly, they indicated they dun the client and take no further action (46%). 78

83 Iowa State Bar Association 2015 Salary & Economic Survey Actions Taken When Fees Are Not Paid in Due Course What actions do you typically take when fees are charged but not paid in due course? FINDINGS About Their Work dun client, take no further action 46% sue client if all other options fail 14% turn account over to a collection agency turn account over to another lawyer 2% 7% other 17% TAKE ACTION 73% base: 653 attorneys at private law practices in Iowa (multiple answers) 79

84 Changes in Demand for Paid Billable Legal Services in Community One in four Iowa attorneys at private law practices (27%) indicated the demand for paid billable legal services in their communities has increased in the past five years. Half (52%) felt the demand remained stable over that time period, and only 14% reported seeing a decrease. Iowa attorneys at private law practices anticipate the change in demand for paid billable legal services in their communities in the next five years to somewhat mirror the changes they indicated seeing in the past five years. 31% expect an increase in demand, while 51% anticipate the demand to remain stable. Only 11% forecast a decrease. 80

85 Iowa State Bar Association 2015 Salary & Economic Survey Recent Change and Expected Change in Demand for Billable Legal Services in Community How has the demand for paid billable legal services in your community changed in the past five years? In the next five years, how do you expect the demand for paid billable legal services in your community to change? FINDINGS About Their Work increase(d) significantly 4% 2% increase(d) somewhat 23% 29% remain(ed) stable 52% 51% decrease(d) somewhat 9% 12% decrease(d) significantly 2% 2% past 5 years next 5 years base: 653 attorneys at private law practices in Iowa 81

86 Educational Debt Held and Percentage of Debt Remaining 89% of Iowa attorneys who have been licensed to practice law for fewer than 10 years had educational debt upon graduating from law school. Among those who did, the average debt held was $117,000. Iowa attorneys who have been licensed to practice law for fewer than 10 years and who had educational debt at graduation indicated they currently have 89% of their debt remaining, on average. Only 8% reported they have paid off their debt in full. Percentage of Debt Remaining Among Those Who Had Educational Debt at Graduation had educational debt at graduation 89% 100% 14% 90-99% 34% 80-89% 12% 70-79% 11% 60-69% 6% less than 60% 13% none 8% mean 74% median 89% base: 323 attorneys practicing in Iowa who have been licensed for fewer than ten years; 288 attorneys practicing in Iowa who have been licensed for fewer than ten years and who had educational debt at graduation 82

87 Iowa State Bar Association 2015 Salary & Economic Survey Educational Debt Held (Among Those Who Had Educational Debt at Graduation) Upon graduation from law school, approximately how much educational debt did you have? FINDINGS About Their Educational Debt $200,000 or more 11% $150,000 - $199,999 $125,000 - $149,999 19% 17% mean: $117,000 median: $119,000 $75,000 - $124,999 26% $25,000 - $74,999 24% less than $25,000 3% base: 288 attorneys practicing in Iowa who have been licensed for fewer than ten years and who had educational debt at graduation 83

88 Monthly Payment and Years Left on Debt The typical Iowa attorney who has been licensed to practice law for fewer than 10 years and who had educational debt at graduation indicated their payment on their debt is (or was, if it is paid off) $651 per month. Monthly Payment on Debt $1,500 or more 10% $1,200 - $1,499 10% $900 - $1,199 9% $600 - $899 24% $300 - $599 28% less than $300 17% mean $782 median $651 base: 288 attorneys practicing in Iowa who have been licensed for fewer than ten years and who had educational debt at graduation The typical Iowa attorney who has been licensed to practice law for fewer than 10 years and who had educational debt at graduation has 18 years of debt payments remaining. 84

89 Iowa State Bar Association 2015 Salary & Economic Survey Years Left on Debt About how many more years of payments do you have before this debt is paid off? FINDINGS About Their Educational Debt 25 or more 20% % % 13% mean: 15.5* years median: 18 years % fewer than 5 8% none debt is paid off 8% base: 288 attorneys practicing in Iowa who have been licensed for fewer than ten years and who had educational debt at graduation *Due to the significant proportion of respondents answering in the top category, the sample statistic may understate the true population mean. 85