Salary Hikes Galore!

Seems like most top law firms in the country are going to follow suit. Salary hikes mean
- firms will want more bang for the buck
- will mean they will either have to increase the number of billable hours required for their associates or increase their billing rates (if the partners want to continue making the same level of profits, which I assume they do)
- Might be a strategy to retain and attract the brightest(of which there are only so many) to maintain/increase their billing rates
- Might be a strategy to fight competition posed by avenues like legal outsourcing (a losing battle eventually)
Bottom line: Nobody retained market position very long by just paying more. Clients will realize that a plethora of legal work is not necessarily the most complicated and hence requires the best lawyers in the country. They will look for and demand cheaper alternatives. Score one more for legal outsourcing/offshoring.
An excerpt from an article in Law.com....

Keker Matches Associate Salary Hikes
Petra PasternakThe Recorder01-17-2006

Days after two big L.A. firms hiked base salaries for associates, San Francisco's Keker & Van Nest announced it was matching the raise.
Keker partner Christopher Kearney said last week that the 50-lawyer litigation firm would increase the base pay for first-year associates to $135,000 to compete with three L.A. firms that announced hikes in the past month.