The 2026 of-counsel window: pay cut or needed seat

The lockstep number an earner brings into the room is no longer last year’s ladder. On 2 June 2026, Law360 Pulse reported, Milbank raised associate bases by $10,000 for years 1–4 and $20,000 for years 5–8, taking first-year pay to $235,000 and eighth-year / senior associate pay to $455,000, effective 1 July 2026. David Lat’s 18 June 2026 Original Jurisdiction column recorded that more than a dozen firms had matched within two weeks. That $455,000 is the ceiling an eighth-year associate now clears. It is not of-counsel pay. It is the floor against which of-counsel cash is a promotion, a cut, or a different product.

Biglaw Investor’s compiled 2026 scale, accessed 11 September 2026, still layers a $115,000 senior year-end bonus on that eighth-year base and compiles total cash to $585,000 once specials are counted. The $115,000 year-end figure is the Cravath scale announced 18 November 2025, as reported the same day by Above the Law and the next day by the ABA Journal; it is not a 2026 bonus reset. An of-counsel candidate leaving an eighth-year seat is comparing a firm title to that bonus-inclusive lockstep, not to base alone.

The surveyed of-counsel row is the one most likely to be misread as a U.S. median. Armanino Advisory’s 2025 Law Firm Compensation, Billing Rate & Benefits Survey sample reports of-counsel total compensation for 43 individuals at 7 firms, with salaries in effect 1 July 2025: average $452,416; 10th percentile $273,400; 25th $285,000; median $313,897; 75th $472,116; 90th $960,000. The gap between that median and the July 2026 eighth-year base is $141,103. Corporate and business of-counsel in that sample (7 people) show a median of $525,000; general litigation (15 people) a median of $300,000. That practice split is the window in miniature: corporate specialist cash can clear lockstep, litigation capacity often cannot. The sample is small and heavily Northern California — San Francisco accounts for 33 of the 43 records on the all-firms compensation cut. Armanino is a CPA and advisory publisher, not a search firm. It is a band, not a census.

NALP’s 2025 U.S. Associate Salary Survey, released 28 May 2025, puts the overall first-year median at $200,000 as of 1 January 2025, with $225,000 the mode and the median in New York City, among other named metros. The lockstep is therefore not the United States median. An of-counsel W-2 that looks like a cut against Milbank can still be a raise against the country. The earner has to name which floor they are leaving. The general counsel has to name which floor they are bidding against.

The occupation-wide floor sits lower still. The Bureau of Labor Statistics Occupational Employment and Wage Statistics survey for May 2025 puts mean annual pay for lawyers (SOC 23-1011) at $185,840, on employment of 754,500. That mix includes government, in-house, small-firm, and large-firm employees; it does not isolate of counsel and it excludes most equity-partner profits. Use it as the occupation floor, then climb the table.

LII Wex, last reviewed July 2023, restates ABA Formal Opinion 90-357’s four permitted relationships. The 1990 ABA PDF itself was not opened for this page; the Wex restatement and the bar opinions that quote it are the sources. The hiring consequence is blunt. The 2026 of-counsel W-2 is one of those four seats. It is not a marketing label for a freelancer, and it is not an in-house title. California Formal Opinion 1993-129 still requires a close, personal, continuous, and regular relationship before a principal may hold another lawyer out as of counsel, and treats the of-counsel lawyer and the principal as a single de facto firm for conflicts. New York City Bar Formal Opinion 1995-8, dated 31 May 1995, requires a close, regular, personal relationship — not a mere referral, not occasional consulting, not a single case — and imputes disqualifications both ways. A company that needs a specialist who is inside a firm’s conflict wall, on a continuing basis, is buying of counsel. A company that needs a senior individual contributor on its own payroll is not.

New York Labor Law section 194-b, as summarized in the Department of Labor’s P687 fact sheet (September 2023), took effect 17 September 2023: private employers with four or more employees must include a good-faith minimum and maximum annual salary or hourly rate in advertisements for jobs performed at least in part in New York, and for remote roles that report to a New York supervisor, office, or worksite. Open-ended ranges are forbidden. The range is base pay. The Department’s own FAQ uses a large law firm with a New York office as the covered example. That is why a New York of-counsel posting in 2026 shows a dated dollar band instead of “commensurate with experience.” The New York City salary-transparency law took effect earlier, on 1 November 2022.

California Labor Code section 432.3 is the West Coast twin. Employers with 15 or more employees must include the pay scale in the posting itself if the position may ever be filled in California, in person or remotely; the Labor Commissioner’s Equal Pay Act FAQ bars a QR-code or link-only workaround. Senate Bill 642 amended the section effective 1 January 2026; the posting duty itself dates to the 1 January 2023 amendments. Combined with New York, that is the statutory reason a national firm’s of-counsel advertisement now publishes a number a general counsel can put next to the lockstep.

The company-desk credential is different. 22 NYCRR Part 522, as amended 15 April 2020, defines in-house counsel as an attorney employed in New York by a nongovernmental entity that is not itself engaged in the practice of law. Registration is for lawyers not admitted in New York; New York-admitted in-house lawyers sit outside Part 522. Scope is the employer and affiliates; failure to comply is professional misconduct. A head of legal hiring a senior individual contributor in New York who is not New York-barred is buying registered in-house counsel. A firm of-counsel lawyer in New York still needs ordinary bar admission. Mixing the two gates is how a requisition dies in HR.

New York mandate telemetry on that associate line records a 37 percent counter-offer incidence and a median 11 working days from offer to acceptance. Of the 33 closed files, 15 were senior-landing searches in which an of-counsel title or an in-house senior seat competed with the brief, and 9 of those 15 were company-desk files (Senior Counsel or Associate General Counsel). None of the 9 company requisitions used of counsel as the job title. That is the unglamorous finding the cash table needs: we cannot mint a United States of-counsel median from our own book, because the company briefs that reach us do not use the word.

A head of legal at a listed industrials company told us they would match ACC Associate General Counsel cash and ignore any candidate who insisted on bringing an of-counsel title across the threshold. The conversation was about reporting line and bonus, not about letterhead. That is the company reader this page is for. The earner who wants the firm title can take it; the general counsel who pays the figure has to know which desk they opened.

Two composites, same New York book, neither named. An Am Law 100 corporate group opened a New York of-counsel search for an M&A and private-equity specialist, class 2015-equivalent, after a year in which announced global M&A printed $4.6 trillion. The brief named a W-2 at or above the live $470,000 posting band and kept equity off the table. Time-to-fill sat inside the 6-to-12-week band. Completion was a yes. The firm bought a needed seat, not a parking place.

A PE-backed healthcare platform opened a Senior Counsel search reporting to the general counsel. The first draft of the brief said of counsel, because that was the title the target candidates held. We rewrote it to Senior Counsel on day one of the mandate. The accepted offer sat in the ACC Senior Attorney to Associate General Counsel total-cash band. A stay-put counter-offer arrived on day 8; the candidate signed on day 11, matching the New York associate-line median. The company did not put a firm title on its letterhead. It put a lawyer on the payroll.

What the files will not do is flatter the method. Five of those 15 senior-landing files ran past 6 to 12 weeks because we allowed a hybrid brief — of counsel or Senior Counsel, firm or company — to stay open into week four. Counter-offers still tracked the 37 percent line rate. The delay was the desk, not the shortlist. A page of of-counsel cash that only showed completed specialist mandates would be a brochure. The stall is why the rest of the book is believable.

If the volume is still on the associate lockstep rather than this window, the 2026 associate scale is the operational counterpart. If the company is buying the corporate ladder rather than a firm title, start from in-house counsel salary and from in-house counsel recruiting. The of-counsel non-equity track — how large the rung is, whether it is a dead end — lives on the track page, not here.