Bonuses and the Reality of Big Law Associate Compensation

The comparison to 1995 salaries is misleading. $85,000 in 1995 adjusted for inflation is $132,037 in 2014, so starting salaries today are 21% higher than in 1995; while median incomes are 5% higher. In other words, starting salaries in 1995 were 2.6 times the median household income, while today they are 3 times. Certainly Big Law associate salaries have increased more than the median household‘s over the past 20 years, and had a higher starting point; but it is hardly "doubled" versus "barely budged."

Cost of living, the expense of living in a big city, high tuition, high debt, all these factors are irrelevant. The only factor that counts is Supply and Demand. If law firms can get all the good talent they need at present levels of comp, no need to pay more. If comp slips then people will start gravitating to other entities in legal/non-legal capacities at entities such as hedge funds, private equity, investment banks, or, alternatively decide the money is not worth it and work for a government, an NGO, or whatever. The system sounds totally fair and sound to me.