There is often the assumption that if you’re a lawyer, you’re set. You’ll be rich; if not now, then certainly one day.
Of course, that assumption doesn’t take other things into account, such as a lawyer’s hours, or even the job opportunities available for people trying to start their careers. The pandemic has also affected lawyer’s prospects, leading to some beneficial changes, and some damaging ones.
More costs, but more money
Inflation may be on most Canadians’ minds now, but law school has been climbing steadily for the last several years. What once cost a couple thousand dollars per year has skyrocketed, says Orit Sinai, partner with ZSA Recruitment.
“It cost 12 years ago $10,000 a year, but now the costs of going to law school have increased substantially across the board,” Sinai said. “Things have obviously shifted.”
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Sinai noted that for Osgoode Hall, one of the top law schools in the country, the program now costs about $25,000 per year. That jumps to about $37,000 for international students. The higher prices have led some Canadians to seek their law school education elsewhere, such as Australia, the United Kingdom, and the United States.
It’s the U.S. that’s posed a problem for Canadian law firms over the last year and a half, Sinai said.
“There’s been a war for talent, a lot of our talent was stolen by U.S. firms,” Sinai said. “About 25% of our top corporate lawyers have moved to the U.S. Mainly to New York, San Francisco and Los Angeles. They were offering lawyers around US$200,000 per year. A first-year lawyer would make about $130,000 on Bay Street.”
The positive note is that to combat this, salaries increased in Canada. The pay raises are most notable for jobs on Bay Street, where there is an enormous demand for top candidates, Sinai says.
“An average lawyer that’s about three or four years out can expect to make $150,000 base salary in house,” Sinai says. “Then about $200,000 at a Bay Street Firm.”
That’s compared to the base of between $110,000 to $130,000 from before the pandemic, Sinai said.
Beyond Bay Street
But if you go beyond the Bay Street firms, there has been a trickle down effect across Canada. In some cases, stellar candidates now have the option to work anywhere in the country, thanks to the rise of remote work. And this also meant rebudgeting to get the best people, Sinai said.
Take Quebec, for example, where hiring out to the U.S. is not as common. As of 2019, 35% of private practice lawyers in the province were making over $110,000. Those numbers increase even more if you focus on Montreal, said Dominique Tardif, president of ZSA Recruitment in Quebec.
And don’t forget the annual bonuses.
“In some places, you’ll have a very generous bonus structure,” Tardif said. “If you put in the New York hours versus the Montreal hours, you’re likely to get it back in part through a bonus.”
The New York hours she’s referring to are the 2,000 hours required each year in the United States, or higher. In Canada, those hours fall to 1,750. While Canadian lawyers receive between a $50,000 and $60,000 bonus in some cases, U.S. lawyers are looking at bonuses closer to US$100,000.
Is it all about money?
If it’s all about the money, being a lawyer is a good start, but Sinai suggests jumping from there to business. That’s where the real money comes in, especially with emerging startups looking for in-house counsel.
“Law school is great and becoming a lawyer is great, but a lot of lawyers get MBAs and get into businesses,” Sinai said. “And that’s a lot of what people should consider, because it’s interesting and very lucrative.”
Tardif agrees, stating that if you’re comparing yourself to a CEO with a private yacht, then lawyers aren’t making that much money. Meanwhile, how much you make can also depend on the area of practice you’re in.
“If you’re working for refugees and helping them out, well you’re likely going to have a lower rate per hour than if you’re working in corporate law merging companies together,” Tardif says.
That being said, Tardif also stresses that no matter what practice you stick with, if you work hard and are the best in the business, the money will follow. But while jobs may be available now, that may not always be the case, she warns.
“I have seen people practicing law because of the money, but ended up hating it and leaving eventually,” Tardif said. “It’s not a 37.5 hour per week job, it can be up to 50 hours a week. So make sure it’s something you want to do.”
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.