Lawyers in London who work at US firms are preparing for juicy pay rises after Milbank hiked associate salaries to between $190,000 and $330,000.
In the US, Cravath Swaine & Moore traditionally raises its pay first and the rest of the top-end US market follows. But this week Milbank stole the job. The firm told its 500 associates that from July 1st, NQs, 1PQEs and 2PQEs will receive a $10,000 raise, while 3-7PQEs will receive $15,000 more.
The firm confirmed that it was pegging UK salaries to the dollar, ensuring that its approximately 100 London associates will share in the bonanza. It means that, on the basis of a spot FX rate, the handful of NQs at Milbank's City outpost will be paid around £143,000 (each).
Kirkland & Ellis was one of the first US firms to peg its UK pay to the dollar, resulting in giant pay rises. A rash of other US firms like Latham & Watkins and Debevoise & Plimpton swiftly followed suit. It is highly likely that those firms will now match Milbank, widening the gulf between the US top-payers and the Magic Circle, where impoverished NQs must struggle by on a salary of little more than £80,000. So far UK firms haven't bought into a salary war with the US, relying instead on brand and, perhaps more importantly, their American rivals' comparatively teeny headcounts in the City, and the smaller number of vacancies that entails.
Even before the latest hikes, Milbank associates conceded to RollOnFriday that "around 163k for 4 PQE isn’t bad", but a couple of them grumbled that their firm was "not quite matching" the New York standard. Now it's setting it. An as everyone at each PQE level at Milbank is paid the same, including bonus, regardless of the hours billed, no-one will feel left out. The downside: there’s "still the odd 2am finish to keep you on your toes".
Comments
The World's gone mad!
One of my friends at an American firm got a £25,000 bonus 2 years ago when he was an NQ
08/06/2018 @ 10:43
"Whereas US-trained lawyers walk out of law school with six-figure debt burdens. Realistically, junior US associates are not living the high life, but trying to make interest payments with their admittedly massive paycheques."
You are no doubt correct for the most part. However, just as an aside on this point, have you read Hillbilly Elegy by JD Vance (2016.) It was a big seller, at least in the US. It is (iirc) in summary how he grew up in Ohio in a [very] dyfunctional family of Kentucky Appalachian origins (e.g. his mother was a long-time oxycotin (?) addict and plenty more.) His grandmother (who may have herself, in her youth, killed a man) sort of held the family together. It's much a story of despair but also an sort of an ode to 'pull yourself up by bootstraps'.
Long story short he joined the military for 4 years (served a tour in Iraq) and afterward used the GI Bill to go to University of Ohio (the UK should introduce this; recruitment problems would disappear overnight.) He was then prompted by various events to study law. Eventually attended Yale and graduated JD. On full scholarship. Which he sort of stumbled into.
He made the point that he could not apply to Stanford because that required a reference from the Dean of his undergraduate school. He never met or knew the Dean at Ohio.
One point he made was that many of his peers in Ohio (even graduates) had no inkling of what kind of scholarships Ivy League universities provide. From their vast endowments. He reckons many, otherwise capable students, through lack of information, assume that their only option is community college or, at best, (public) state university.
I left my copy in Spain so I can't check and don't recall if he ever actually practised law (no TC's in US of course) but now works for some sort of conservative think tank or some such in California.