What law school graduate can survive on $125,000 a year?

Apparently not the kind Irell & Manella LLP and Quinn Emanuel Urquhart Oliver & Hedges LLP want to attract.

For the first time since the burst of the tech bubble, the two Los Angeles law firms are raising their first-year associate salaries to $135,000. Irell announced the raise first, and Quinn followed suit.

David Siegel, managing partner of Irell, said the firm has performed well in the past year, with $199 million in 2004 revenue, up 13 percent from the year earlier. Profits soared to $1.54 million per partner, the highest in Los Angeles.

With fewer than 250 lawyers, Irell and Quinn Emanuel are among the most successful mid-sized firms in Los Angeles. Their decision to raise first-year associate salaries signifies a jump in the economy not seen since the burst of the dot-com bubble several years ago.

“Ever since the collapse of Silicon Valley, it has remained at $125,000,” said Delia Swan, owner of Swan Legal Search in Los Angeles. “It’s due to have an increase. I wouldn’t be surprised if other firms followed suit to become competitive.”

Still unclear is how some of L.A.’s largest firms, including Latham & Watkins LLP and Gibson Dunn & Crutcher LLP, might respond. But the recent moves mimic the days of the dot-com bubble when law firms scrambled to offer salaries that competed with those at Internet startups.

In late 1999, Menlo Park-based Gunderson Dettmer Stough Villeneuve Franklin & Hachigian LLP shocked the legal world by raising its first-year associate pay to $125,000 from $95,000. Many firms, competing for the same clients and top lawyers, matched the challenge by raising their salaries to $125,000.

Irell is “one of a couple of firms we regard as competitors for top legal talent, and we couldn’t have one of our primary competitors paying more than we were,” said Bill Urquhart, a partner of Quinn Emanuel.