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Meagre Slaughter and May pay rises create two-tier Magic Circle
06 May 2016
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It seems a two tier Magic Circle may be developing, as Slaughter and May announces pay rises which leave its associates on up to £15,000 less than their peers.

Trainee and NQ salaries are both rising by £1,500, while 1PQE pay is increasing by £3,500. Both 2PQE and 3PQE salaries are increasing by £3,250. Insiders have dismissed the increases as "at best in line with inflation", saying that S&M's lawyers are "pretty disillusioned"  because the firm has failed to match the bumper raises which Allen & Overy gave its lawyers last year.

 £k 2016 rise?
NQ
1PQE 2PQE 3PQE
Allen & Overy
 Not yet
 78.5  92  104.5  115
Linklaters*  Yes  81  90  100  111
Clifford Chance
 Not yet
 70  75.5  88  98.5
Freshfields**  Not yet
 70  75  90.6  96.8
Slaughter and May (old pay)
 Yes  71.5
(70)
 79
(75.5)
 90.25
(87)
 99.75
(96.5)

*Unlike the other firms, Linklaters releases figures which include the bonus along with the salary, so its figures appear higher. The figures in this table are a median salary plus a median bonus.

**Freshfields NQs and 1PQEs fall within Freshfields' "Career Milestones Foundation" band which pays between £67,500 and £77,500. 2PQEs and 3PQEs fall within "CM1" which pays between £87,500 and £100,000. RollOnFriday takes the figure in the middle.


The result is that a significant gap pay has been reinforced, with NQs at Slaughter and May being paid £7,000 less than their A&O counterparts, rising to a £15,250 difference at 3PQE level. An associate said, "we don't expect to keep up with US firms, but when a lawyer at the same PQE at another MC firm is earning £10k more than you when your firm has just made up 10 new partners, it starts to grate".

    Earning just £99,750: how it feels

Slaughter and May's refusal to match A&O establishes a two-tier Magic Circle for pay, with only A&O lawyers currently in the upper band, alone with their gold. Linklaters has also given pay rises in 2016, but it included bonuses in its figures which, once discounted, drop it back into the bottom tier with everyone else.

It remains to be seen which way Freshfields and Clifford Chance will jump. Neither has announced 2016 pay reviews, and staff are waiting to learn whether management will elevate them to A&O wealth, or conclude that what's good enough for Slaughters is good enough for them.

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anonymous user
06/05/2016 07:50
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Shock Horror - Breaking news - the Magic Circle is no longer MAGIC. Seriously though how can you talk about two tiers This "small increase" is no doubt a reaction to difficult markets and their pay rates will undoubtedly bounce back once their core business returns after Brexit mania dissipates.
anonymous user
06/05/2016 08:44
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@7:50 Its hard to make the "difficult markets" argument when S&M have by far the highest PEP of all of those firms. Sounds more like an issue about how the firm values its associates.
anonymous user
06/05/2016 08:49
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A&O will raise its salaries again this year as well. Big gap starting to open up. Anecdotally, the US firms are also bumping their pay as I have noticed recruiters adding £10-20k to salary offers over past two months.
anonymous user
06/05/2016 10:21
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Don't know exactly how it works at S&M, but does the fact that they don't have target hours have something to do with it?
anonymous user
06/05/2016 12:19
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Look out for the Freshfields announcement which was made this morning... They're playing the A&O game.
anonymous user
06/05/2016 13:58
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There is some quite serious spin going on here. A&O's salary appears to be much higher because last year they decided to add the basic level bonus to the base salary. A&O has for a long time paid higher wages overall - it is just more apparent now that the proportions of salary/bonus have been adjusted. And, in fairness, having worked at SandM and knowing people at A&O, I'm pretty sure they work much longer hours at A&O on average.
anonymous user
07/05/2016 00:26
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Freshfields NQ salary is always 67,500 not 70
Slordiojoe
10/05/2016 16:15
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The Slaughters partners will take the view that the superior prestige and therefore exit opportunities compensate for a slightly lower salary. Not to mention working less hours overall because they are more choosy with what they take on.
M&mrs
01/06/2016 15:52
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What a load of rubbish. Look at a law firm m&a table, it's been years since Slaughters topped it. It's called not valuing your associates and keeping pep high at all costs.