Compensation & Benefits
Study Report - Executive Summary
September 2006
The 2006 Paralegal Compensation and Benefits Report
and the Executive Summary of the report are the property of the National
Federation of Paralegal Associations, Inc. It is unlawful to duplicate any
portion of this document without written permission.
4 Order the full report here
HISTORICAL TRENDS
The survey was administered by the National Federation of
Paralegal Associations in July 2006. A total of 1,468 individuals responded to
the survey. This study has been conducted by NFPA many times over the period 1993-2006.
In this period, gross salaries have climbed steadily 61% since 1993, a compounded
3.8% annual growth rate; or an inflation adjusted 15% since 1993, a compound
annual growth rate of 1.1%.
- During the 1993-2006 period, bonuses rose 85%.
- 401(k) savings plans are now offered to 81% of paralegals,
up from 65% in 1997.
- Pension/retirement plans are now offered to 34%, up from 45%
paralegals in 1997.
- Life insurance has also grown somewhat, from 68% in 1997 to
77% today, while vacation and paid sick leave have increased slowly toward
covering almost all respondents.
- Fully paid medical insurance is also declining, from 52% in
1997 to 32% in 2006.
PROFILE
Geographic Profile
Almost 40% of participating paralegals come from the
Midwest, while one-fourth come from the Northeast and just under one-fifth each
from the South and West. The primary difference in this profile from past
studies is a reversal in the proportion from the Northeast vs. Midwest.
- Paralegals indicate a mean of 11.0 years of professional
experience: 17% indicate 0-2, 13% 3-5, 26% 6-10, 19% 11-15, 15% 16-20, and 12% greater
than 20 years.
- Almost all (93%) are full-time paralegals. They directly
report to either a partner (48%), paralegal manager (10%), office manager (8%),
an associate (5%), or another position (30%).
- Most (89%) are Caucasian, with some African American (4%),
Hispanic (2.6%), and the remainder Asian/Pacific Islander, Native American, or other.
Educational Profile
The educational profile of participating paralegals is most often a
Bachelors' degree with a paralegal certificate, cited by 32%, followed by an
Associates' Degree in Paralegal Studies (20%), or a Bachelors' in Paralegal
Studies or in some other field (roughly 11% each).
- A smaller number report having a Masters' degree or Ph.D., a high
school diploma, or an Associates' degree in another field.
- The most common field in which a degree was attained was Paralegal Studies
for 45%.
SALARY
The average current salary reported was a mean of $50,496
and a median of $49,000. One-fourth of paralegals report salary at or below
$40,000; and one fourth report salary at or above $60,000.
- Mean salaries tend to increase substantially with years of
total experience. Raises do as well but on a percentage basis they are proportionate
to salary. Bonuses also tend to increase up to a point with experience, and
overtime earnings also tend to plateau and, although they change in an absolute
level, they tend to flatten as a proportion of total earnings after you reach
five years of total experience.
BONUS
One third of paralegals indicate that they typically receive
a bonus. Last year, among those who typically receive a bonus, 91% did so.
- The average bonus overall was a mean of $2,994 and a median
of $900. One fourth of all bonuses received were $3,500 and above; one fourth
were $2,000 or lower. The maximum reported was $62,700; the minimum, of course,
was $0. We included zero bonuses in the average if the recipient typically
received a bonus.
- Just over one-fourth received a bonus under $1,000; while
23% received a bonus in the $1,000-$1,999 range; 16% in the $2,000-$2,999
range; 17% in the $3,000-$3,999 range; 13% in the $5,000-$10,000 range; and
almost 6% received a bonus of $10,000 or more.
Bonus: Total Amount by Region
- By far the highest average bonus was reported in the
Mountain Region, a mean of $6,203 and a median of $1,800. Although the other
Western Regions (California/Hawaii and Pacific Northwest) and New
England, Southeast, East South Central, and Midwest Central all
report mean bonuses above $3,000, the median bonuses are relatively consistent
geographically, with medians ranging from $500 to $1,200.
Bonus as Percent of Salary
- The average bonus as a percent of total salary was a mean of
5.5% and a median of 3.8%, with one fourth above 6.6% and one fourth below 1.8%.
- By region, the bonus has the highest proportion to salary in
Mountain Region (9.5%), followed by Southwest, East South Central, Middle
Atlantic South, and New England.
RAISES
The average salary increase reported was a mean of $2,384
and a median of $1,000, with one fourth above $3,000 and one fourth under
$2,000. The maximum reported was $18,000 while the minimum was a $1,200 salary
reduction.
- The actual amount of raise is most commonly between 3% and
5%; roughly one sixth of paralegals each report raises falling in the 3% and 4%
ranges, while roughly another one-tenth each report raises in the 2%, 4%, 5% and
6% ranges.
- There is also a surprising number reporting very high increases:
15% report raises greater than 8% while on the other extreme, 20% indicate no
increase and 4% indicate receiving raises up to 2%.
- By range, raises were $0-$1,000 for 20%, in the $1,000-$1,999
range for 23%, in the $2,000-$2,999 range for 26%, in the $3,000-$4,999 range for
19%, and above $5,000 for 11% of responding paralegals.
OVERTIME
Today 35% of paralegals are exempt employees, while before
the DOL rule changes in 2005 47% were. The impact has been substantial. The
average overtime received was a mean of just over $5,000 and a median of
$3,500, with one fourth indicating earning $6,000 or more, and one fourth
earning $3,000 or less. The maximum reported was $75,000.
- The distribution of overtime paid is generally in either the
$1,000 to $5,000 range, or above $5,000; 35% of eligible paralegals each indicated
earning overtime at those levels, while 21% earned between $300 and $1,000, and
9% indicated earning up to $300.
- As an average ratio to salary, overtime is a mean of 8.9%
and a median of 5.6%, with one fourth above 10.9%
BENEFITS
The most common benefits offered today are vacation
(reported by 93%), paid sick leave (85%), a 401(k) savings plan (81%), and life
insurance (77%). Also dues reimbursement (73%), personal paid time off (71%),
dental insurance (70%), and continuing legal education reimbursement (70%) are
available to more than two-thirds of members.
- Less common but still available to half or more are
long-term disability insurance (64%), partially paid employee medical insurance
(58%), vision insurance (51%), and paid professional time off for association
activities (50%). Less common are flexible scheduling (45%) or ability to work
from home (29%), alternative to other common more common optional approaches to
benefits, such as pension retirement (34%), fully paid employee medical
insurance (32%) or medical supplements (19%), or unpaid time off or association
activities (15%).
- Paralegals tended to indicate a far higher proportion today
receiving the most popular benefits such as vacation, paid sick leave, 401k,
life insurance, personal time off, and dental insurance. . Some of this
increase may be due to the fact that some respondents didn't indicate receiving
any benefits prior to 2005.
BILLING
Just under 70% of paralegals indicated that they have a
billing rate. Among those who report one, by far the most common falls within
the $71-$130 range with 15% reporting a billing rate in the $71-$90 range, 13%
in the $91-$110 range, and 12% in the $111-$130 range. This translates into an
approximate average rate that is a mean of $111, and a median of $106.
Billable Hours
- A total of 60% indicated N/A or otherwise noted that they do
not operate under a minimum billable hours. For the remainder, the mean is 1479
and the median 1500.
Job Satisfaction
- When asked to rate their satisfaction with their job,
paralegals give it an average score of 4.0 on a five-point scale: 34% are
"extremely satisfied" and 45% are "somewhat satisfied"
while only 7% are "neutral,"12% "somewhat dissatisfied,"
and 3% are "not at all satisfied."
- Naturally there is a strong relationship between the
perception that one is well paid and overall job satisfaction. Those who say
that they are fairly compensated have a job satisfaction rating of 4.4 and 52%
are extremely satisfied with their job; those who are unsure have a job
satisfaction rating of 3.9 with 23% still extremely satisfied; and those who
say they are not being fairly compensated have a job satisfaction rating of 3.3
with only 11% extremely satisfied with their job.
- Another important indicator of job satisfaction is revealed
by the fact that 11.5% answered in the affirmative that they plan to leave the paralegal
field within two years.
HIRING REQUIREMENTS
Employers most often require that applicants have a
Bachelor's degree (44%), completion of an ABA
approved paralegal program (40%), or some specified number of years' experience
as a paralegal (38%). Somewhat less common requirements included an Associates'
degree (20%), a non-ABA paralegal program (8%), or a professional designation
(5%). A total of 15% indicated "no educational requirement," 10%
indicated "no experience requirement" and another 17% did not check
any box, which we also interpreted to mean no requirements.
- Those who do require a set level of experience indicate an
approximate mean of 5.5 years and a median of 4.8. One third of paralegals participating
in the study indicated 1-5 years, 12% indicated 6-9 years, 9% indicated 10 or
more years, while 45% provided another (often more general) response.
Job Search
- Most commonly, paralegals indicate that they obtained their
present job through a friend of colleague, followed by classified advertising
or a placement firm. Fewer than one-tenth each report using the Internet, a
resume mailing, receiving the position through a promotion, or moving into the
position accompanying an attorney. Fewer than 5% each found the position
through a school, internship, or some other method.
Credentials Held
- Only 12% indicate that their position requires specific
credentials. The most common among those who indicate "yes" are RP
(42%), CP/CLA (36%), or a state specific credential (26%). Very few of those
who require a credential require CLAS or AACP.
Association Memberships/Involvement
- Most members indicated that they belong to at least one
national and their local paralegal association (95% and 65%, respectively). A
total of 7% were or had been involved in the board of a national association,
while 27% were or had been involved in a local association's board.
- Members indicate most commonly belonging to NFPA (62%) or a
state association (comprising the majority of "other" which was
indicated by 40%). NALA was checked by only 8% and a combined 21% expressly
indicated "none" or didn't respond to the question.
SPECIALTY
Litigation is by far the most common specialty reported at
46%.
- Six specialties—Contracts, Real Estate, Corp Governance,
Personal Injury Defense, and Probate Estates/Trusts—are reported by between 15%
and 20%. Another seven—Personal Injury (Plaintiff), Insurance, Commercial,
Labor & Employment, Intellectual Property, Family, and Medical Malpractice—are
reported by between 10% up to 15%.
- Others including Product Liability, Administrative, Personal
Tort, Bankruptcy, Business Tort, Workers Comp, Securities, Environmental,
Criminal, Tax, and Civil Rights, are indicated by fewer than 10% each and
"other" is reported by over 20% and reported verbatim in the Appendix
of this report.
- One third of paralegals indicate being involved in one or
more aspects of legal service provider selection: 22% monitor need for
services, 15% each participate in the research prior to the RFP process and
interview/review, with the number dropping during the stages of interview/RFP
review and contract negotiation.
4 Order the full report here
The 2006 Paralegal Compensation and Benefits Report
and the Executive Summary of the report are the property of the National
Federation of Paralegal Associations, Inc. It is unlawful to duplicate any
portion of this document without written permission.
|
