Law departments based in expensive areas, such as the major coastal cities and Chicago, often think that their compensation must be higher than that of competitor’s law departments in the hinterlands. The more modest cost of living, they assume, allows the remote departments to pay less.
The trouble is, compensation surveys don’t confirm this supposition. As was explained to me during a study of pharmaceutical comp levels, the cultural and other attractions of large cities have value to many lawyers as compared to lower-cost, less populated locations, so compensation among the lawyers in the top law departments do not show marked cost-of-living differences. This still strikes me as counter-intuitive, but statistics don’t lie.