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Exclusive: Huge pay rises at Freshfields
13 May 2016
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Freshfields has given its associates massive pay rises which put NQs on £85,000.

The Magic Circle firm's trainee salaries are rising by £2,000, with first year trainees to be paid £43,000 and second years £48,000. But the rises really rocket after qualification, where the firm uses a performance-based banding system it calls 'Career Milestones'. The lowest band, 'Career Milestones Foundation', covers NQs and 1PQEs and used to be £67,500 to £77,500. The new band is £85,000 to £97,500, an increase of around 25%. It means NQs will be paid a minimum of £85k, and while they were previously eligible for a discretionary bonus, the firm has said that their new salary exceeds the previous salary and bonus combined.

2PQEs and 3PQEs fall within "CM1" which used to pay between £87,500 and £100,000. They will now be paid between £105,000 and £115,000, and that's without discretionary bonuses. With bonuses, 2-3PQEs can earn between £126,000 and £136,000. Taking Freshfields' median figures (without bonuses) the Magic Circle salary table now looks like this:


 £ 2016 rise?
NQ
1PQE 2PQE 3PQE
Allen & Overy
 Not yet
 78,500  92,000  104,500  115,000
Linklaters*  Yes  81,000  90,000  100,000  111,000
Clifford Chance
 Not yet
 70,000  75,500  88,000  98,500
Freshfields (old pay)
 Yes
 85,000 (70,000) 94,375 (75,000)  107,500
(90,600)
 112,500
(96,800)
Slaughter and May
 Yes  71,500
 79,000
 90,250
 99,750 

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

The move will leave Slaughter and May lawyers feeling sore. As reported in last week's news, they expected their firm to match Allen & Overy's bumper salaries. Instead the firm resisted and created a two-tier Magic Circle for pay. The only question was which way Freshfields and Clifford Chance would jump. Now, Freshfields has jumped. In fact it has leapfrogged right over A&O, at most levels. Its NQ pay is higher than A&O's by £6,500 (and £13,500 more than Slaughters'), while it only pays less at 3PQE, assuming the lawyer is not awarded a bonus. Meanwhile, Its straight salaries now dwarf Linklaters' figures, which include bonuses.

    Get in

Staff were told last Friday and delighted insiders leaked the news to RoF within minutes (leak your stuff to RoF within minutes too, please). Julian Long, London Managing Partner, said "Our ability to attract and retain the most talented individuals is critical to our continued success". He added, "Obviously we should not underestimate the need to be competitive with regards to pay in our market; we believe that making changes across the board for our trainees and associates maintains our strong position as one of the most attractive firms in the market".

Staff at Clifford Chance will be feverish with anticipation. In the meantime, celebrating Freshfields lawyers should probably raise a glass to A&O's management.
 

Comments

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anonymous user
13/05/2016 10:40
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The Linklaters numbers don't include bonuses. £111K is the top range of salary that you can get at 3PQE; bonus is in addition.
anonymous user
13/05/2016 16:50
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Yes - somebody here is very confused. Linklaters have rolled a part of the bonus pool into the salaries so that bonuses are now in theory smaller, but salaries are larger. Everyone is still eligible for a bonus.
anonymous user
14/05/2016 07:55
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Re the first comment above - the article says that LL's figures are for a median salary and median bonus. Those figures at the median level may well be the same as just the salary (excl bonus) at the top of the range...

And for the second comment, yes, Linklaters have increased salaries and decreased bonuses at the junior end. But it seems that they also now release just a "total cash" remuneration amount which is the amended salaries and bonus lumped together.

In other words, compared to the likes of FF (and presumable A&O/CC to come) they are haven't increased the remuneration pool much overall.
anonymous user
17/05/2016 11:13
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any FF insiders able to comment on how reliably the CM levels equate to PQE? Is annual progression the norm or is it used as an excuse to hold people back?
anonymous user
17/05/2016 12:07
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@11.13 It fairly reliably equates to PQE for the juniors (essentially the table above details the first two milestones).

Beyond that its a slightly different story when it comes to milestone progression.