The next series of newsletters will analyze the financials, cost of living and tax arrangements that will hopefully point you to where you can make the most money. There is always a lot of debate about where an Australian lawyer can make the most money and with the Australian dollar moving up and down like a yo-yo in recent months, a brief analysis is certainly overdue. Most lawyers would say that New York or one of the off-shore jurisdictions like the Cayman Islands or Dubai appear to make the most sense given the very high salaries paid in New York and the tax free status of the latter locations. Given how much the Australia dollar has appreciated in the past 6 to 9 months, particularly against the US dollar and Pound Sterling, many lawyers (particularly mid to senior level associates with leading firms) are finding it difficult to justify their overseas moves financially – or so it seems.
In this edition we look at New York. Typically salaries in New York for a first year associate start at US$160,000 and go up by about 10K each year or class band so a 5 year associate is typically making about US$230,000. Bonuses amongst the elite US firms are also paid yearly on top of the base salaries and are usually about US$30,000. In comparison, a first year senior associate (5 years of experience) in Sydney usually starts off on a salary of about A$150,000 and as we know bonuses here in Australia are more discretionary and fall short of the 30K US firms pay in New York. So a 5 year lawyer in New York can make circ US$260,000 whereas in Australia (even with e.g. a 20K bonus) the same lawyer is on about $A170K as a first year SA after 5 years of experience. That is about a 90K difference when the Aussie dollar is at parity. No small change. So New York remains one of the most lucrative places for a lawyer to work on the back of very high base salaries and huge annual bonuses. The other thing to note is New York remains a relatively inexpensive place to live and even rent in Manhattan is no longer streets ahead of what you pay in undersupplied Sydney! Taxes are also high but not as high as the top marginal rates in Australia.
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