West Coast Salary Survey

A Report by The Cowen Group

In Part One of our salary survey series (Litigation Support Today, August/October issue), we offered information on the litigation support market and examined distinct positions on the East Coast. In Part Two of this series, we will identify the salary ranges for litigation support professionals on the West Coast, examine differences between the East and West Coast markets, and articulate several trends that affect all litigation support professionals on a national level.

Survey information was collected through personal and telephone interviews and online questionnaires. 125 West Coast organizations participated in the survey, including law firms, vendors, consultancies and Fortune 500 companies. For purposes of this survey, “West Coast” is defined as the areas encompassing San Francisco, Palo Alto, Los Angeles, San Diego and Seattle.

Rising Salaries

Annual salaries for litigation support analysts ranged from $40,000 to $65,000 in 2008 while specialists’ incomes ranged from $65,000 to $95,000. Project managers earned incomes ranging from $80,000 to $125,000; managers earned $125,000 to $175,000; and directors earned $175,000 - $250,000 (see Figure 1).

Salaries continue to rise on the West Coast and throughout the industry as demand exceeds supply (see Figure 2 and 3). Not only is the Am Law 200 increasing litigation support staff levels, but vendors and consultancies are also recruiting litigation support personnel. Moreover, Fortune 500 corporations are expanding their litigation support ranks as they establish e-discovery units within their organizations.

Another impetus for rising salaries is the shrinking talent pool. As a result, employers are raising salaries to compete for the best talent. Salaries will continue to increase until the industry determines a way to routinely train paralegals, IT staff and others for positions within the profession. While most firms would welcome the opportunity to train new recruits, they lack the time and budget to train, given the rate, scope and complexity of discovery. Litigation support tasks are too large, complex, and risky to test a newly minted litigation support analyst or project manager in a large project. If trained new candidates do not enter the marketplace, the industry will continue to see double-digit salary growth and will continue mining for talent in the same places.

Coastal Compensation

Compensation on the West Coast differs from the East Coast. A greater demand for litigation support and a higher cost of living on the East Coast (salaries were twenty-two percent higher in New York than Los Angeles), have raised base salaries in the East above those of the West Coast. For example, on the West Coast, project managers typically earn base salaries of $80,000 to $125,000 while their East Coast counterparts earn between $95,000 and $140,000 annually (see Figure 4). However, a seasoned project manager in Los Angeles with four or more years of experience can earn a total compensation equal to or more than a seasoned project manager in New York because project managers qualify for paid overtime due to California labor laws.

The compensation of analysts also reflects coastal differences. An analyst on the West Coast typically earns a base salary between $40,000 and $65,000, while their East Coast counterparts earn between $60,000 and $80,000 annually (see Figure 4). Since most analysts on both coasts work significant overtime, they often earn total annual salaries in excess of $100,000.

Drilling for Talent

The number of vendors that provide litigation support services vary across the country, with significantly more providers located on the East Coast. The proliferation of East Coast vendors is one reason many law firm personnel on the East Coast begin their careers with service providers. Because fewer vendors exist on the West Coast, West Coast firms have focused on developing their internal paralegals that are already familiar with firm culture. Thus, West Coast firms are more likely to transition a paralegal that has end-user technical experience into a litigation support role, strengthening technology skills on the job. The migration of paralegals into litigation support also diminishes the number of available opportunities for litigation support professionals on the West Coast.

Size Matters—But Bigger Isn’t Always Better

The number and size of litigation support departments within the Am Law 200 varies greatly between the East and West Coast with approximately ten times as many litigation support professionals on the East Coast than in the West. New York alone has nineteen law firms with litigation support departments that exceed twenty people. Larger East Coast numbers are due, in part, to the fact that sixty-three of the Fortune 500 companies make their homes on the East Coast, compared with nine on the West Coast.

With more corporate clients and government agencies to serve, East Coast law firms tend to be structured differently. Larger litigation support departments in New York, Washington, D.C., and Boston require a more vertical approach to staffing (i.e., more layers of management). Since the volume of litigation on the West Coast tends to be smaller than the East Coast, West coast firms do not require as large an infrastructure and can operate on a more horizontal organizational chart (fewer titles and less hierarchy).

This horizontal manner of staffing translates into fewer jobs on the West Coast for mid-level litigation support professionals, creating a major gap between seasoned professionals and new talent trying to move up the career ladder.

What Makes a Specialist Special?

On the West Coast, the role of the litigation support specialist is unique. Half project manager, half analyst, the specialist often serves as a strategic advisor and client liaison by day and then rolls up his sleeves to perform the heavy lifting at night. The demand for the specialist is tremendous in the West. Due to smaller department sizes, West Coast firms increasingly demand litigation support professionals who can “do it all” when it comes to discovery lifecycle case management. In fact, in the West, project managers are sometimes called specialists and vice versa.

Evolution Not Revolution — The Role of Managers & Directors

From 2004 to 2007, we saw a revolution in litigation support hiring. During that time, many of the Am Law 200 were establishing significant litigation support departments while others were doubling and tripling the size of their existing departments coast-to-coast. Now that litigation support leadership and infrastructure are in place, we are witnessing the evolution of roles for the manager and director.

The role of the director, who is responsible for firm-wide coordination and promotion of litigation support services and technologies, will continue to become more strategic and tactical. Directors will be significantly less involved in the operational side of litigation support services and will drive those responsibilities down to managers at a national, regional, and local level.

While some firms desire their litigation support manager to possess a J.D., market trends indicate that an M.B.A. may be of equal or greater value to current and future leaders within the space. We will be exploring the value of each degree in our next survey.

Forty-one firms in the Am Law 200 do not yet have an internalized litigation support department. The growth of such firms’ litigation support functions will create opportunities for seasoned regional managers and project managers to migrate there and establish departments.

The opportunity to build and grow a department from scratch presents an exciting, and often lucrative, challenge. From 2007 to 2008, we saw a ten percent increase in management positions that involve building and creating new departments in rising firms, and a fifty percent decline in management positions that involve inheriting and running a pre-existing department.

The demand for experienced talent with the ability to provide strategic and tactical leadership will continue to grow. At the same time more senior level supervisors and project managers are being promoted into management roles as firms on both coasts expand their litigation support practices.

The Best is Yet to Come

Looking into 2009, it will be critical for litigation support managers and directors to get a firmer grasp on the profits and losses of their departments and staff.

Business analysis will increasingly help clients, stakeholders, and firm management understand the financial implications involved in managing litigation costs that can reach the multi-million-dollar range. This analysis will help firms and organizations better track financial information and profitability as well as the complex matrix of utilization rates and the ratio of litigation support staff to attorneys and write-offs (fees that must be written off due to non-payment). The ability to collect and analyze this data will empower directors and managers to make the best possible business case to the partnership for more resources, staff and tools, and will set the future strategy of the group.

These strategies, along with new tools, better processes, and more experienced people, will have an important and meaningful effect on the future of our industry. In a world where we generate four billion e-mails every day and litigate before we negotiate, career opportunities for litigation support and e-discovery professionals are strong—no matter where you call home.

Contributor: Material for this article was contributed by David Cowen, founder and president of the Cowen Group. He is a subject matter expert in building critical legal support teams and lectures and writes extensively on “the war for talent.” For more information on the Cowen Group and the litigation support market, visit www.opportunityknocksblog.com.