Large Bay Street law firms are increasing the base salaries of their associate lawyers, even as legal recruiters say hiring has slowed in response to the economic uncertainty that’s been created by U.S. President Donald Trump’s tariff threats.
The extent of the raises varies depending on the firm, but appears to be around $5,000 annually for early-year associates and as much as $15,000 to $20,000 for those in later years. These increases are the first significant bump since 2021, when a banner deal-making year forced firms to increase compensation in order to retain and attract young lawyers.
For top-tier firms, the compensation boost means a first-year associate is now earning around $135,000 annually before bonuses, while a seventh-year associate has a base salary of around $275,000. The rates can differ between firms and some use a salary band rather than a grid in order to further reward top performers.
Osler, Hoskin & Harcourt LLP, Torys LLP, Goodmans LLP, Stikeman Elliott LLP and McCarthy Tétrault LLP are among the Seven Sister firms that have raised associate base pay. (Davies Ward Phillips & Vineberg LLP and Blake, Cassels & Graydon LLP would not comment.) Additionally, Norton Rose Fulbright Canada LLP, Cassels Brock & Blackwell LLP, Borden Ladner Gervais LLP, Fasken Martineau DuMoulin LLP and Aird & Berlis LLP have also increased compensation for associates.
Legal recruiters said the raises are coming at an interesting time, given a slowdown in the law firm job market.
Warren Bongard, president and co-founder of ZSA Legal Recruitment, said with the uncertainty around Canada-U.S. relations, they’re seeing hesitancy on both sides of the equation: Law firms are holding off on bringing in new hires and candidates are waiting to see what happens with the economy before jumping to a new shop.
“If you’re walking into a potential recession, it’s last in first out. I think that applies in any downward cycle,” Mr. Bongard said. (As an aside, he added that while law firms aren’t hiring as much, there is still robust demand in the in-house market, which refers to lawyers who work as employees for businesses.)
With the tariff threat looming over corporate Canada, big law firms are also bracing for a hit to their bottom line amid less deal activity. It may seem like a strange time for firms to raise their compensation costs, but Mr. Bongard said it’s a sign that firms are thinking in the long-term. Once this period passes, they want to make sure their best talent has stuck around.
Neda Canario, a senior vice-president of legal recruitment with BJRC Recruiting in Toronto, said she has also seen that some firms have paused their recruitment activity, although lawyers with certain specializations – particularly insolvency, litigation, tax, labour and employment – are still in “great” demand.
Ms. Canario said that the associate raises are partly in response to inflation.
“The cost of living has gone up. And there’s a general dissatisfaction among associates who are working really, really hard,” she said.
Senior leaders within the law firms told The Globe that part of what triggered the wave of increases was competitive pressure. Once one firm raises compensation, others need to follow in order to keep their own people happy.