Magic vs Silver Circle?
overwhelminglyobese 14 May 22 23:59
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I'm looking for a step down (please, I'm not trying to trigger people), more evenings and weekends, and I'm looking for anecdotes. No idea about the money beyond figures for NQ which are published, no idea about salary bunching or hours or reputation nowadays.

Quite of lot of people I know have ended up at A&O, CC, Links, Ashurst, Travers, Macs, and Mishcons (which to my knowledge was just a large chippy boutique, but now likes to call itself "silver circle" but those moved at partner and around getting upped to partner where I think it is quite juicy)

Back around 2005, a partner at any one of those shops could have a feck off big house in a reasonable area, sole bread winner, kids in private school, but nowadays with inflation, it seems they're living in crampt mid terraces with both spouses working hard.  

This has nothing to do with magic vs silver circle.

In the 80s, equity partners had a house in Hampshire and horses and suchlike.

In 2005 they might have had a "house in a reasonable area".

This is not just about Russians and other naughty foreign sorts inflating house prices, although that is a thing.

What it's really about is that despite incredibly low interest rates since 2008, the value of money has halved since then fgs. Imagine the change since the 80s. My dad bought a car in the early 80s for 20 quid.

Yet salarys haven't changed that much (ok a bit recently but everyone is like "omg salaries have gone mad!"), hourly rates have only changed a bit, nil rate band has hardly changed, meanwhile stealth taxes like NI keep going up... the list is endless.

As i said above - the reason law firm partners these days have no money has nothing to do with magic v silver circle.

It's 50%, what's the difference - should I even bother if salaried partners earn less than I do now. 

And it's 50% the salary vs inflation point you make i.e. back in the late 90s, MC NQ was late 50sk, then 60k up to about 2014 ish and by 2015 it was about 70k. Then year by year it nudged up to 80k and then around 2019 finally started coming close to 100, and in the last year or so from 90 to 125. 10 year period where the salary remained fixed when it should have doubled as property went up many times that. The question is then, how do we re-inherit the wealth of the partners in the 80s when PP is virtually double IH salaries, the rest of the UK has stagnated into nothingness, and there are seemingly no more profitable exit options.

NQs are very odd these days 

I was only worried about chinning beers, chasing talent and working hard.

OP soundS like the sort of motivated and competent employee firms would be falling over themselves to employ 

True risky. Lots of very entitled people at a junior end of the law. 

But they can take chances as the BOMAD will pick them up when they get let go.

End of the day if you are doing CP lists you may as well get paid more for it. There is interesting work out there for people if they want it, don't have to wait until partnership 

Both are shite. May as well get more money, better international opportunities and more “prestige” that comes with the MC badge. 

The MC and SC never really existed, just an invention of the editor of Legal Business magazine way back when.

The top corporate teams at Herbert Smith or Lovells would not worry too much about the supposed MC.

Anyway, those two firms have since merged with other firms and become something else entirely.

“The question is then, how do we re-inherit the wealth of the partners in the 80s when PP is virtually double IH salaries, the rest of the UK has stagnated into nothingness, and there are seemingly no more profitable exit options.”


Easy - you have one of them as a parent. And then you spend your free time lobbying for higher income/comsumption taxes because  lets save the world etc etc. Whilst capital, land and inheritance taxes are kept low and are never spoken of.

Its income socialism. Its a bit like Victorian capitalism - except the workers are given more pay  to start with but then have most of it taken back off them in tax.  And can then afford the rent on just half a terraced house rather than a whole one.

I think they did sort of exist and the MC continues. But SC has been meaningless simce aboiut the time SJB collapsed.

The original MC was the two leading banking firms (CC and A&O) and the three leading corporate firms (S&M, Freshfields and Linklaters). In the view of Legal Bisuness that is. It didn't make much sense at the time and even less now.

This has nothing to do with magic vs silver circle.

In the 80s, equity partners had a house in Hampshire and horses and suchlike.

In 2005 they might have had a "house in a reasonable area".

We're never going to get back to those days, not unless you have a time machine.  Until then, content yourself with the knowledge that even if you only make it to salaried partnership at almost any City firm, you'll be far above probably 99% of the UK population income wise.   

Not true. You can just get a flat near work and a big mega mansion somewhere a little further north. Work from the mega mansion with wife and kids on Mondays and Fridays, London flat with live in girlfriend, or escorts Tuesday-Thursday. 

If you’re a proper equity partner at any of the firms named above you’re creaming it. Big house, non-working spouse etc etc. They’re making more money than ever. Not really sure what OP is on about. 

Everything Canary Worf said. The current EQT are creaming it By today’s standards but they are nowhere near the living standards of the EQT even 20 years ago, much less 40+ Even though the 1980s EQT guy earned a smaller absolute number it bought a much better lifestyle in pretty much every respect. 

As noted above the main culprits are inflation plus the cost of some components of the lifestyle (housing and private schooling especially) going up way faster than inflation plus a tax system crushing income earners and favouring asset owners and capital 

So the answer is then no difference between MC/SC - go wherever I've got the best chance of equity? But some people are saying the MC only makes up those who have been with them from the start.

Which is the best to get partnership as an outsider?

A lion works out at roughly 44.5k pcm netnet. That’s a lot of cream to spare even with a flash gaff on Frognal and two kids at Westminster. 

Going abroad makes no sense re accumulating capital. Why would it? Explain.

The tax argument doesn't work necessarily. Because you just bolt on the 100-132k UK tax bracket into pension and get employer contributions of 5% gross. So the net differential between a tax free c.130 and a UK 130k gross isn't ball dropping.

In fact, when you take into account the increased cost of living abroad in certain places and the expenses of flying to and fro etc. it becomes unnoticeable. 

And what happens if you're at a US firm in London, or even a magic circle earning 140k in London and Herbert Smith abroad is offering you 110-115k at the same level tax free. And what happens if the exchange rate they're offering you is bunk because the dollar is strong right now.

You haven't thought this through at all.

Heh, so I actually work abroad and can assure you I very much have thought it through; you think offshore firms don’t have equivalent pension arrangements? 

“it becomes unnoticeable”

This is one of the dumbest takes I’ve heard on here, and I have read clergs’ posts. What on earth are you going on about with exchange rates? 

I can see you’re equity material.

Sorry dear, I didn't realise you worked at an "offshore firm" in Jersey. Let me talk more slowly.

2PQE at CC in London (c.£125k) versus being a 2PQE at Herbies in Abu Dhabi (c.£110k, but paid in dirhams at 500k AED where the dirham is tied to the dollar which is very strong and the pound is very weak, a year ago that would have gotten you 550k when the dollar was weak)

You'll get no workplace pension generally in Saudi, UAE etc.

So in London, the CC associate nets £66k and puts the £25k above the £100k tax trap into pension and gets c.£8 employer contributions, so netting nearly £100k total.

But the Herbies associate nets the 500k AED which translates to £110k net. 

Then you have cost of living differences and overall you might expect with food being more expensive in Abu Dhabi, plus a few extra k flying to and from the UK, to lose £5-10 in additional costs, plus any cash conversion costs too from AED to £.

You're not making any more money. 

You haven't thought this through, puppy.

So, you’re drawing an equivalence between pension contributions and cash, the latter which is immediately utilisable, and you think they’re the same thing and that therefore there’s no difference? Why exactly do you think people work offshore haha

“Wherever I’ve got the best chance of equity”. Bro, you’ve got no chance at equity. Nobody does. Although I’m starting to think you may be at uni still as the pension differential seems to be quite a novel idea to you.

Oh dear, the backpeddling and agreeing with everything I've written, only to try to point out that pension is not immediately utilisable cash! So what? 

Yes, it's 55 now, will be 58 probably soon and probably will go up to 60 before you can draw, BUT it's compounding in your pension pot and being managed and you'll draw down more than putting in a savings account, or worse - those internet investors who try to game the stock market.

What matters is buying a UK property and letting it accumulate in value - you don't need "immediately utilisable" cash stacked in a draw somewhere.

The end proposition is that the money is the same, but a third of it is not utilisable right now for unknown purposes you might need it for. Unless you've got a high-class hooker addiction, it doesn't matter and you'll net more long run from your pension.

So you’d prefer an equivalent amount, 25 years in the future, against the cash that you could use for any personal means, like housing. schools, holidays, or other luxuries? Cash which can be shoved into a vanguard fund and will deliver a better return anyway? 

lol, alright mate


for any personal means, like housing. schools, holidays, or other luxuries? 

Housing? This magical 30k up front a year isn't causing any dent in anything.

Schools? Let them eat cake.

Holidays? Already taken into account in the salary differentiation. Wherever offshore you are, you're far from everything else so you have to do expensive long haul flights, and you can't do them every weekend due to time differences and jet lag. And holidays aren't expensive anyway - flights are cheap, so are reasonably nice hotels.

Other luxuries? Like what? Escorts?

Cash which can be shoved into a vanguard fund and will deliver a better return anyway? 


And when you're retired, you're not working. You can draw down the money for food, bills, the toilet paper you need to wipe the sh1t you're typing away. 

Don't know about you, but I'm going to live until I'm at least 90. I'm going to need to draw down the funds. I have loads of disposable cash to use until I'm 60 anyway.

Sorry I just don’t agree with you. Incidentally, you keep on coming up with this 30k net figure, of course forgetting the fact that large bonuses are typical offshore. If you want to defer your money until you retire then good for you I guess? It seems almost mechanical not having anything else in mind you’d rather spend it on; do you live an ascetic life? Also, taking the annual growth rate of a pension is just poor when you can do better by a couple of points at least with some sensible investing (which keeping that capital available).

I just don’t see the attraction, sorry. Oh yeh, no salary bunching offshore either. So every year past 1PQE it makes more and more sense.


N.B. Criticise offshore for the real reasons: dead-ends your career if you want to go back to London; small groups of gossipy pats isn’t that fun for some; shite schools etc. 

But arguing over the money just makes you look silly, especially when the headline figures are publicly available.

It's right - at 1.13 yesterday, you said if you wanna accumulate capital, go offshore.

[You've then conceded the point (apparently) that net net you're making about the same when you take into account, (i) pension mitigation of the tax trap; and (ii) additional costs involved with going offshore.

Your rebuttal is that (i) pension is not upfront income which you could spend on other things and/or invest better; and (ii) there are also tax free bonuses (which I am not forgetting).]

But that's bollocks because you're not investing in Bitcoin in 2010, you're playing around on Vanguard and basically not doing any better than a pension fund. In reality, no one has time, knowledge, skill or ability to become a superstar trader hobbyist.

The bonuses are fairly unsubstantial until you get senior - and UK / US firms pay what they pay in London - you're putting that all into the 40k tax free pension max. 

Where you are "correct" is that the more senior you are, the more sense it makes. The larger your bonus.The bigger your salary. You probably don't understand tax very well, but by taking out the maximum tax free 40k pension, between c.140-160k in the UK, about 60% of your income is taxed. Now on my example of HSF, I think a 5PQE only makes about 130 at the moment, but when salaries start going higher and higher, the greater your tax saving.

However, what you don't understand is the value of UK property investment. If you are in Saudi or the UAE or offshore, you cannot buy property in the UK unless it's a buy to let with a very unfavourable lender. You can't get a nice resi mortgage and then let it out (by way of agreement with your lender or not telling them). So your rent in x offshore country and your mortgage in the UK offsets, but the property goes up and up in value.

That's why person A going to HSF in Abu Dhabi at 1PQE, and person B staying at CC in London, and buying a flat, when HSF tries to come back to London at 5PQE, the London CC associate will be wealthier than HSF - he'll own a flat which has gone up £100-130k in value, and when pension and savings are taken together, they'll have about the same.

That's why you are fundamentally mistaken, and it appears that money is a dear explanation to your heart re reasons to move, but people are generally accumulating more capital at home, contrary to your posts.

A 2-3PQE is netting 50-60k with bonus every year offshore, which is a cheap BTL every two years; it makes literally no sense to claim that isn’t superior. What a bizarre argument. My point is literally based around the idea of purchasing property.

Your argument is based around:

1. Deferring a huge amount of money 25 years into the future when you have no idea what you’ll be doing, forgetting that for 99% of people 50-60k a year is a life-changing amount that enables one to live differently.

2. Not understanding that the entire point of going offshore is to buy property with cash, which most people do on a two-yearly cycle. Then they’ll typically take advantage of the foreign student lack of guarantor advantage to bank 6 months rent upfront, every let.

Nobody’s taking any mortgages out, what are you on?

I’m done here. You should probably get back to your contract revision because you have no idea what the pay/bonus structure is like offshore.

I broke down an example for you - without bonus the figures are almost the same. With bonus, you could expect maybe £10-20k more total. You've thrown £50-60k out of thin air. 

If you earn £110k with a  £10k bonus - you're maybe saving 80k a year; you can't buy a flat for £160k (i.e. 2 years of savings) unless you go up north on which you'll make maybe 10-13k per annum.