Post-GFC trainee recruitment reduction plus short sighted 0-5pqe retention policies, plus US firms with jam today instead of tomorrow pay expanding, gutting UK Top 10's most lucrative workstreams, plus massive stored dry powder among PE and record low borrowing costs for corporates plus COVID related weakening of businesses ripe for takeover.
It's brutal at the moment working in M&A/finance/funds/PE etc. Especially for junior lawyers. Sadly, paying money seems to be the only thing law firms can do to keep people there. They could of course staff deals better, say no to ridiculous client deadlines and actually care about their staff but why do that when you can just throw another 10k at them. People take this money for a few years and either join a US firm for even more money but ultimately leave private practice within a few years due to boredom, burnout, stress or just wanting a life. That doesn't matter to the law firm as there are a hundred fresh faces who will replace them happily.
And will other MC firms do the same , where does it end . It’s still 40/50 k below US counterparts, unless they are not competing for the same talent ?
What people fail to realise is there aren't that many highly paid lawyers the same way there aren't that many highly paid "bankers". Law firms are a relatively cheap insurance policy. If you've never seen an advisers' costs spreadsheet for a restructuring I can assure you legal fees are way down the list e.g. 3-4% of IB fees.
As I pointed out on another thread recently, the Law Society did a survey in 2018 and the average salary of a Solicitor in full-time employment is £62k.
There are a relatively small number of people in 'Big City Law' earning significantly more, which leads the public to think we are all fat cat lawyers.
Yes Bananamsn , but IBanks work on a contingent basis , if the deal doesn’t close they don’t get a penny. Lawyers get paid as soon as the lift a pen ….
is it? the country has got far more than 10 per cent richer since 2000 in real terms (even accounting for the recent clusterfook) so it is hardly surprising lawyers are being paid 10 per cent more.
ebitda, perhaps in your line of work but the days of setting the clock running have long gone, and not sure IBs are working on a 3% success rate or failing to stiff their clients in lots of other exciting ways in exchange for running a "project management" call consisting of "do it by tomorrow" while performing relatively basic excel calculations. In the end it still comes back to the same point anyway - there aren't that many people in either of these fields that have the willingness to work 24/7 and the intelligence and experience to spot the issues. My mate who is a tree surgeon has lots of deluded twots that think it should be £200 to take down a couple of trees, and in-house w**kers moaning about fees are part of the same breed.
Also I agree with Guy's point. The ramp up to £50k NQ was after law firms had been hiding behind Law Soc minimums (which might still happen in Scotland?) for decades. £50k at a stretch for 2 got us a basement flat in Islington pre-GFC. Not sure two on £100k are getting that now?
Bananaman a lot of the time you are paying high whack for lawyers who can't spot the issues though, junior lawyers are rarely good value. It's the seniors who are.
Progressive tax, lose personal allowance, difference less than prima facie obvious. 10k after tax given that article than Travers, Simmons, BCLP, Squires, NR etc, less at other MC - c6-7k. But if in team where hours are 10-20% higher, there may be a significant impact on work life balance and when you have a mortgage, and can live reasonably comfortably anyway, actual impact is less than at first blush. Also more you earn, more you spend consciously or unconsciously esp when stressed - a few minor decisions add up and whittle those additional funds largely away.
There is still a 40-50k pre tax difference between US firms, which gets bigger every year because they actually increase salaries, and U.K. firms bunch salaries with miserly PQE increases which they don’t reveal to the market. They’re all wearing Spanx to cover up what’s underneath basically.
The salaries are not high. The business model is chargeable hours x fee rate. US firm NQ goes for about 410-440, U.K. around 300-330 and latter does 2000 chargeable hours which are recovered, U.K. firm has associates doing 1600-1800, and has a worse recovery rate. US firm staffs only few associates so overall rates comparable to MC or even cheaper, despite 1 or 2 associates block billing 12 hours a day on a matter; clients know what they’re getting, partner is often working for only a few clients with long term relationships so they pay up generally without much discount. Do the maths and you’ll see US firms make 800-900k for an NQ-1, and U.K. about 500-600k.
All about recovery, utilisation, fee rates, client management, and leverage.
Accordingly whilst people mock me on here, genuinely Dubai offers a proposition for a young buck to work less and earn a lot more than either a U.K. or US firm based in London, thereby preserving his or her youth, and growing wealth optimally. Exit for a Family Office at your discretion.
what is fooked up about the solicitors business model is that the range of non partner pay and rates is too narrow (typical less than 100%). I am not sure why clients agree to paying so much for junior lawyers, the bar pricing model is far more realistic- junior juniors are cheap as chips but the rate ratchets up sharply as they get more experienced.
I agree Guy, why don't firms structure it so juniors don't get paid huge amounts but seniors get a good whack. When I was client side I would be happy to pay that.
I'd see junior pay as an admission of the failure of the city firm career model. It's the only way people will do it and also the only way to generate "prestige" when the reality is gash.
The market is a bit weird at U.K. firms now. They put up NQ pay because that seems to get the headlines but salaries are really bunched up now such that a 5PQE doesn’t get that much more than an NQ.
Miles behind US firms as well. Even more so than what it says online. I am getting paid more by new shop than what the reports say about salaries for my level.
It’s all headline grabbing and trying to keep pace with US firms (I’m going to one but wasn’t for the $$). As MC/SC firms try to recruit future talent these little press bites about competing NQ salary should entice more applicants? Not that they’re struggling in that regard.
Just seems like the same Legal Cheek article copied over and over. By the time I start my first seat, never mind qualify, it’ll have gone up again.
That's out of what - 500k plus graduates per year?
Also those calling for low pay until they have "earned their stripes". This is the ruse UK firms pulled for decades, but before you are least had a chance at tomorrow's jam. Don't worry - when you get to 5pqe we'll quadruple your pay. What do you mean you want a fixed term contract? What do you mean you'll go and work for GS, Google, Amazon instead?
Amazon spends all its money working out ways to make more money. Most partners spend it buying holiday homes and covering school fees, and those on the bottom rung woke up to US firms being not that different and paying you now. As their "better training", "don't move too much", "better prospects" lies have been exposed, Uk firms are now scrabbling to get the people in to do the grunt work and exploiting those at 5-8PQE who have wasted their time putting down the hard yards in exchange for relatively nothing.
I'd be worried if I was an NQ at Links on that pay. It's danger money and a sign that you will be expendable pretty quickly once they've broken you. I suspect this marks a return to up and out but at much more junior levels those firms used to do.
Plus, it's probably designed to piss off the senior associates on discretionary increases by meaning they are paid not much more than baby lawyers in the hope they'll flounce.
£50k for NQs in 2000? I didn't pay attention then, but I'd be surprised. Pretty sure I remember hearing of £50k in 2007 - might then have crept up to 60 but then it dropped in the crisis when we all got frozen.
It went up to 50k when I was getting n law school 99-00 and was the same when I qualified in 03. Moved to US in 04 and went up to just shy of 90.
iirc as an NQ I did a winding up start to finish, a huge investigation of emails in relation to a certain Italian milk company that mislaid $4bio, an admin of a West Country engine manufacturer and the ITV digital administration.
It was around 55-60k in 2004ish at MC, rose to all around 60ish by the time of the crisis in 07-08+
US was around 80-90 from 04, by 07 most had consolidated closer to 90.
Then these salaries stayed the same even after the crash. In 2012-14, NQ was still around 60-65. 90 for US for NQ.
In 2015-16 the US was more 90-95. Then around late 2017-2018, the rates jumped to 110-120. In 2019, they upped to 130-140, and 2020-21 to 140-150.
Meanwhile the MC slowly upped from 65 ish in 14 to 75-80 in 18. In 19 I think it was around 85-90, where Eversheds are now. In 20-21, they suddenly upped to 100k.
So salaries were frozen pretty much for 12 years minus a total 5-10k increase.
However, everyone is taken away with the optics of the bigger numbers, but the next phase of the revolution is waking up to the fact the taxman is taking 50% of their salary.
And with that, Dubai will become hotter than the sun.
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It's a beautiful thing.
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Post-GFC trainee recruitment reduction plus short sighted 0-5pqe retention policies, plus US firms with jam today instead of tomorrow pay expanding, gutting UK Top 10's most lucrative workstreams, plus massive stored dry powder among PE and record low borrowing costs for corporates plus COVID related weakening of businesses ripe for takeover.
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It's brutal at the moment working in M&A/finance/funds/PE etc. Especially for junior lawyers. Sadly, paying money seems to be the only thing law firms can do to keep people there. They could of course staff deals better, say no to ridiculous client deadlines and actually care about their staff but why do that when you can just throw another 10k at them. People take this money for a few years and either join a US firm for even more money but ultimately leave private practice within a few years due to boredom, burnout, stress or just wanting a life. That doesn't matter to the law firm as there are a hundred fresh faces who will replace them happily.
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Where does Dubai fit in.
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£100,000 to proof-read word docs WTF. is law really that hard?
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Is it that much more in real terms than the 50k offered to NQs at the start of the 2000s?
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And will other MC firms do the same , where does it end . It’s still 40/50 k below US counterparts, unless they are not competing for the same talent ?
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Was it 50k for a NQ in 2000?
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Brutal hours - the extra money keeps people from leaving basically. Well that's the idea anyway.
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Partly wot Davis said, but it's also utter madness.
Why don't clients complain?
Oh that's right, because it's a cartel and there's nothing you can do about it.
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What people fail to realise is there aren't that many highly paid lawyers the same way there aren't that many highly paid "bankers". Law firms are a relatively cheap insurance policy. If you've never seen an advisers' costs spreadsheet for a restructuring I can assure you legal fees are way down the list e.g. 3-4% of IB fees.
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* Davos
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I don’t know by but I am joining a US firm in the new year and pretty much doubling my money. Long may the pay wars rage.
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The job is very boring, but requires bright motivated people to do it.
The only way to get bright motivated people to work very long hours in a boring job is to pay them a lot of money.
I have no problem with it because it is the free market. If clients do not want to hire a magic circle firm they do not have to. It is their choice.
As a lawyer I am massive fan of these price wars.
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What bananaman said.
As I pointed out on another thread recently, the Law Society did a survey in 2018 and the average salary of a Solicitor in full-time employment is £62k.
There are a relatively small number of people in 'Big City Law' earning significantly more, which leads the public to think we are all fat cat lawyers.
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Yes Bananamsn , but IBanks work on a contingent basis , if the deal doesn’t close they don’t get a penny. Lawyers get paid as soon as the lift a pen ….
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Ah apologies you were on about restructuring.
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50k in 2000 equals 86k in 2020.
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EP if you take the “top” 30 firms by turnover there must be what 20000 plus lawyers on 6 figures plus?
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Yeah but more like 90k in 2021, so no huge increase really
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Guy it’s a big increase. Then at 3 PQE on about what 140?
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is it? the country has got far more than 10 per cent richer since 2000 in real terms (even accounting for the recent clusterfook) so it is hardly surprising lawyers are being paid 10 per cent more.
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ebitda, perhaps in your line of work but the days of setting the clock running have long gone, and not sure IBs are working on a 3% success rate or failing to stiff their clients in lots of other exciting ways in exchange for running a "project management" call consisting of "do it by tomorrow" while performing relatively basic excel calculations. In the end it still comes back to the same point anyway - there aren't that many people in either of these fields that have the willingness to work 24/7 and the intelligence and experience to spot the issues. My mate who is a tree surgeon has lots of deluded twots that think it should be £200 to take down a couple of trees, and in-house w**kers moaning about fees are part of the same breed.
Also I agree with Guy's point. The ramp up to £50k NQ was after law firms had been hiding behind Law Soc minimums (which might still happen in Scotland?) for decades. £50k at a stretch for 2 got us a basement flat in Islington pre-GFC. Not sure two on £100k are getting that now?
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I like how the focus is on associate pay and not the millions that partners at these firms now take home
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Bananaman a lot of the time you are paying high whack for lawyers who can't spot the issues though, junior lawyers are rarely good value. It's the seniors who are.
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Progressive tax, lose personal allowance, difference less than prima facie obvious. 10k after tax given that article than Travers, Simmons, BCLP, Squires, NR etc, less at other MC - c6-7k. But if in team where hours are 10-20% higher, there may be a significant impact on work life balance and when you have a mortgage, and can live reasonably comfortably anyway, actual impact is less than at first blush. Also more you earn, more you spend consciously or unconsciously esp when stressed - a few minor decisions add up and whittle those additional funds largely away.
There is still a 40-50k pre tax difference between US firms, which gets bigger every year because they actually increase salaries, and U.K. firms bunch salaries with miserly PQE increases which they don’t reveal to the market. They’re all wearing Spanx to cover up what’s underneath basically.
The salaries are not high. The business model is chargeable hours x fee rate. US firm NQ goes for about 410-440, U.K. around 300-330 and latter does 2000 chargeable hours which are recovered, U.K. firm has associates doing 1600-1800, and has a worse recovery rate. US firm staffs only few associates so overall rates comparable to MC or even cheaper, despite 1 or 2 associates block billing 12 hours a day on a matter; clients know what they’re getting, partner is often working for only a few clients with long term relationships so they pay up generally without much discount. Do the maths and you’ll see US firms make 800-900k for an NQ-1, and U.K. about 500-600k.
All about recovery, utilisation, fee rates, client management, and leverage.
Accordingly whilst people mock me on here, genuinely Dubai offers a proposition for a young buck to work less and earn a lot more than either a U.K. or US firm based in London, thereby preserving his or her youth, and growing wealth optimally. Exit for a Family Office at your discretion.
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what is fooked up about the solicitors business model is that the range of non partner pay and rates is too narrow (typical less than 100%). I am not sure why clients agree to paying so much for junior lawyers, the bar pricing model is far more realistic- junior juniors are cheap as chips but the rate ratchets up sharply as they get more experienced.
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Also what Threepwood said.
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I agree Guy, why don't firms structure it so juniors don't get paid huge amounts but seniors get a good whack. When I was client side I would be happy to pay that.
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£100k really isn't what it was.
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I'd see junior pay as an admission of the failure of the city firm career model. It's the only way people will do it and also the only way to generate "prestige" when the reality is gash.
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The job isn’t that bad, it’s fine; people on here just don’t understand how law firms work, and that’s fine because your sort don’t need to.
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Didn’t this happen in 2000 and 2007 too, immediately followed by a crash? Seems like very top of the market behaviour
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The market is a bit weird at U.K. firms now. They put up NQ pay because that seems to get the headlines but salaries are really bunched up now such that a 5PQE doesn’t get that much more than an NQ.
Miles behind US firms as well. Even more so than what it says online. I am getting paid more by new shop than what the reports say about salaries for my level.
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It’s all headline grabbing and trying to keep pace with US firms (I’m going to one but wasn’t for the $$). As MC/SC firms try to recruit future talent these little press bites about competing NQ salary should entice more applicants? Not that they’re struggling in that regard.
Just seems like the same Legal Cheek article copied over and over. By the time I start my first seat, never mind qualify, it’ll have gone up again.
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We need more BSD humblebragging. The City is about that.
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Everyone saying that this is a tiny part of the profession are misrepresenting thing IMO
There are over 1000 TCs per cycle at firms that pay £85k +. Given the top 5 unis will kick out only 60-70 1sts a year, it’s a good time to be looking.
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That's out of what - 500k plus graduates per year?
Also those calling for low pay until they have "earned their stripes". This is the ruse UK firms pulled for decades, but before you are least had a chance at tomorrow's jam. Don't worry - when you get to 5pqe we'll quadruple your pay. What do you mean you want a fixed term contract? What do you mean you'll go and work for GS, Google, Amazon instead?
Amazon spends all its money working out ways to make more money. Most partners spend it buying holiday homes and covering school fees, and those on the bottom rung woke up to US firms being not that different and paying you now. As their "better training", "don't move too much", "better prospects" lies have been exposed, Uk firms are now scrabbling to get the people in to do the grunt work and exploiting those at 5-8PQE who have wasted their time putting down the hard yards in exchange for relatively nothing.
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No, that would be what the proof-reading team is for.
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If you earn 90k in Dubai at Simmons as an NQ, that’s the equivalent of 160k odd in London
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I'd be worried if I was an NQ at Links on that pay. It's danger money and a sign that you will be expendable pretty quickly once they've broken you. I suspect this marks a return to up and out but at much more junior levels those firms used to do.
Plus, it's probably designed to piss off the senior associates on discretionary increases by meaning they are paid not much more than baby lawyers in the hope they'll flounce.
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Jesus you guys are so detached from city law
i genuinely wonder what you do
so many bullsh1t assumptions
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far, far fewer grads from unis that matter. There are only like 9-10 even worth going to, everyone else should be looking at a different career.
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That’s not true either - anything from RG is fine especially with a first
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I know quite a few pats with twin incomes living on less than one of them and banking the rest.
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That’s what I’d call a business model.
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£50k for NQs in 2000? I didn't pay attention then, but I'd be surprised. Pretty sure I remember hearing of £50k in 2007 - might then have crept up to 60 but then it dropped in the crisis when we all got frozen.
But hey, good on em.
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It went up to 50k when I was getting n law school 99-00 and was the same when I qualified in 03. Moved to US in 04 and went up to just shy of 90.
iirc as an NQ I did a winding up start to finish, a huge investigation of emails in relation to a certain Italian milk company that mislaid $4bio, an admin of a West Country engine manufacturer and the ITV digital administration.
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It was around 55-60k in 2004ish at MC, rose to all around 60ish by the time of the crisis in 07-08+
US was around 80-90 from 04, by 07 most had consolidated closer to 90.
Then these salaries stayed the same even after the crash. In 2012-14, NQ was still around 60-65. 90 for US for NQ.
In 2015-16 the US was more 90-95. Then around late 2017-2018, the rates jumped to 110-120. In 2019, they upped to 130-140, and 2020-21 to 140-150.
Meanwhile the MC slowly upped from 65 ish in 14 to 75-80 in 18. In 19 I think it was around 85-90, where Eversheds are now. In 20-21, they suddenly upped to 100k.
So salaries were frozen pretty much for 12 years minus a total 5-10k increase.
However, everyone is taken away with the optics of the bigger numbers, but the next phase of the revolution is waking up to the fact the taxman is taking 50% of their salary.
And with that, Dubai will become hotter than the sun.
Join the discussion