Heh even within the same industry it's probably more than most senior associates at decent but non Magic Circle City firms are getting. 

As a purchaser of legal services, we’ve been debating this. It’s a difficult issue to Solve but we aren’t going to put up with ever increasing charge out rates, particularly at the lower end.  

Isnt the US firm model more or less that they pay one person two peoples salaries to do two peoples jobs?

It's not even a market rate set by supply and demand.

I'm several years PQE but it's call criminal law and regulatory with a bit of random shit thrown in for good measure.

I would happily retrain into whatever boring area of law they practise for £150k.

I might even e mail them and ask the question.  

So what is a 5 PQE getting?  

Go on then.

so the realisable target is going to be 2500 hours?

what's the hourly rate for these ingenues? 

In all fairness it's the US model of a 9-5 job.  As in you start at 9am on Monday and finish at 5pm on Friday.

Working late into the night / early hours of the morning is fairly regular as is working on Saturday.  

It's the sort of thing you do for 5 years and either make partner or crash out into the shires for a steady job but way less money.  

It's more a question for the Magic Circle. if your PEP is roughly the same as a US firm, why aren't you willing to share more of the pie like they are? 

I worked at a US firm. I was beasted no harder than the MC associates on the same deal.

I know 4 PQEs at a couple of US firms were getting 240k ish before the recent pay rises. 

Rubbo you obvs have the inside track, but aren't there varying degrees of "US firm"?  I mean, presumably a Reed Smith is a bit different from a Kirkland?

I’ve never understood the actual salaries in law. You read of this and RoF is full of quarter lions and dub tuns but on another thread Donny (who knows what he’s talking about) said that hardly any lawyers are paid these sums. 
 

So you get to £150k in a few years and where does it go from there? Are people “career associates”? Does they pay go up? 

Highlights how ridiculously uncompetitive MC salaries are. As a senior associate at an MC firm, my base last year was £140k. The bonuses are also very underwhelming (regardless of how well the firm does).

Does the £140k go up or is that it until you’re a partner? If you don’t become a partner can be a senior associate until you retire? 

So move. 

Once you get made up to senior associate, you go off the associate pay lockstep and get an individual pay rise each year (mine went up by about 4% this year). Whether you can be a career SA or not probably depends on the team. If they like you enough to keep you around but don't like you enough to make you a partner, counsel is generally way of getting out of the "up or out" conveyer belt. 

NQs are f ucking shit, let's face it

how ridiculously uncompetitive MC salaries are.

They're not really uncompetitive though are they. The yank high payers cream off the best talent / ones who are willing to not have a life but there are only so many of those jobs. MC salaries are excellent in comparison to all other law firms / most other walks of life.

Its like championship footballers moaning about PL salaries. If you were good enough youd be playing for a top team, if not, just accept it.

From a client perspective it is crazy. NQs can't generally do much more than grunt work because they don't have the relevant experience. Is there a difference in the quality of photocopying between an NQ at Mills & Reeve and at Kirkland? I assume not. Therefore we don't want to pay the uplift and even if their pay isn't reflected in charge-out rates it may well be reflected in the productivity of the NQs chargeable hour or in the increased risk that they will make a mistake due to being overworked. Moving up the ranks, the same types of issues appear at Associate and Senior Associate level. How can I trust someone to competently manage our work when they are presumably living off four hours sleep a night? If on the converse they are not then that would presumably be reflected in the charge out rates, which would then be uncompetitive against others in the market. Absolutely fu*king bonkers if u ask me Clive

What Kamar said. MC is taking the piss these days.  Partnership prospects are pretty much as shit as at US firms but without the massive salaries and bonuses.

The MC still pretends that the extra training and work-life balance is worth 50+k less a year, but if you are in a transactional team I find it very difficult to believe that can be true.

I work in an advisory team and our lot in life is better than our corporate and lev fin teams but we still put up with long hours and interrupted weekends and holidays on a pretty regular basis.

At a lot of US firms the work I do would be less interesting (lots and lots of corporate support in deals) but that is changing fast. A few US firms now regularly win work that is at least as interesting as ours. 

perfectly reasonable

they need quite smart (so competition with consultancies, accountants, banks etc) + cost of living in expensive city + cost to have someone working round the clock so client feels like they have instant access + cost to retain that person for 5 years cause churn is a thing but too much churn would be a mess 

for that work - you're pushing that number - not super hard work, but boring and lots, which not anyone can do, so it costs

Also, it’s a mistake to think you are paying extra for quality when you use a US firm. It may depend on the area, but you are generally paying more so they will turn it in a ridiculously short time-frame and answer emails and join calls at 3am to work around the client’s time zone.

The problem is that this is increasingly the case in many MC departments too but their lawyers get mugged off by the greedy partners. 

Why would MC put salaries up when there is still hundreds of people applying there?

If there was a massive shortage then yes but let's face it, the public schools are churning out thousands of people who want to be solicitors every year. Even the lowest paying firms can recruit 15/20 trainees a year after a hugely competitive process. 

What Kamar said. MC is taking the piss these days.  Partnership prospects are pretty much as shit as at US firms but without the massive salaries and bonuses.What Kamar said.

so why haven't you moved to an US firm?

100% what davos said. The MC know there will always be another bright young person coming along. Sure the yanks will have their pick but plenty more fish in the sea. They just need to keep their salaries in line with the rest of the MC and above the next tier of city firms.

Why haven’t I moved? Partly because I have a new baby and partly because the ones that have interesting work in my still smallish niche are not hiring at my level.

I may try and move again when the baby is a bit bigger. 

They just want to make sure they get the brightest, but more importabtly greediest and most workaholic geeks in town.  Sounds like they will!  

Interesting logic by Vinsons (sorry Elkins only first name matters)

Rightly or wrongly, people do judge a quality of a firm by what it pays and there is strong brand recognition/goodwill in these stunts. After all they can only pay it if they are doing loads and loads of high value work. 

I doubt any London partners sponsored this pay rise. 

What Asimov says, its about international time zones turnaround , and international market recognition.

I use them occasionally and they are good but no better than most of the top 100.

Still not sure why they need to pay that much to a NQ but I guess they know what they are doing. Certainly never struck me as the kinds of places who would give out more than they have too.

I also think Beresford’s view (one seemingly shared by MC partners) is complacent. Nobody outside lawyers care what the MC is it who is in it. There is no real reason why a Hogan Lovells or a Norton Rose can’t close the gap on the MC and it wouldn’t take that long before the brightest graduates don’t care whether they join Herbert Smith or Clifford Chance. 

At the same time, the US firms are more competitive every day across the board. If you go to Latham or my shop for advice the quality will be the same in most areas. The days of the MC being the “best” are over save for a few niche areas.

The MC will claim they have huge international networks and big teams to throw at deals but so do Bakers. 

There is no real reason why a Hogan Lovells or a Norton Rose can’t close the gap on the MC 

Except the MC would just put their pay up to make sure they're ahead of those lot.

As I said, those are the firms they need to stay ahead of, but they don't need to get into a stupid arms race with US firms who can subsidise their UK operations from abroad.

@ escaping puppy , I agree . The current salary war with large city firms and the London office of US firms is silly and so unnecessary, I wonder if it’s Willy waving.

it’s not like there is a dearth of people applying for these TCs. They could half the money and still get thousands of applicants for their training contracts. The U.K. firms should stop pretending to compete with the US firms . They cite work life balance and prestige of working at Freshies. Absolute bollocks if I’m doing 100 plus hours a week I may as well go to Kirkland or wherever and pick up £145 k plus bonus 

Thanks Kamar- I understand it a bit more now. 
 

At the end of the day £100k gets you into the top 2% of earners and £180k (I think) is top 1%. Lawyers seem to lose sight of how well paid they are. 

It's so competitive that many graduates aren't too bothered which of these firms they join as long as one of them offers them a job.

Largely what Kamar said.  I'm senior associate with nudging 15 years PQE and I get a bit of a pay rise every year but nothing much more than inflation.  The firm is happy to have me around as I'm less expensive than a salaried partner but can be left to deal with pretty much anything without supervision and to some extent generate my own work.  Also spend a chunk of my time helping juniors with stuff they don't want to bother a partner with and the partners know that.

Picking up on what Foxbat said one of the partners I worked with as a trainee reckoned PI insurers should ask firms how often people work after midnight and increase their premium accordingly as many mistakes happen when people are working late and are busy and tired.

ebitda, it’s probably less about attracting graduates and more about retention. It costs a lot to train people so makes sense to keep them and poach good NQs from elsewhere.

If the US and MC halved NQ pay people wouldn’t stick around because the job is often crashingly dull. 

Crypto: this board is such a concentrated group it's easy to lose sight of what a tiny, tiny pool of people is being talked about. 

What's a magic circle firm annual trainee intake? 40? And that's the biggest around. That's like... how many people Deloitte will recruit just to do telecoms sector tax audit every year. 

The MC will undoubtedly find a way to muddle through in the short to medium term but the issue is that the lifestyle/package really isn't that attractive anymore (unless you are obsessed with making partner and are ok with having no life but you might as well be at a US firm then).

I agree with those saying "if you don't like it, leave" as that it was I intend to do. At rut end of the day, these days being at the MC seems to offer exceptionally awful hours without US level comp. Accordingly, it's better to bite the bullet and go to a US firm or take a pay cut and go somewhere with a general work-life balance.

Also, people are correct in that there will always be loads of graduates clamouring for trainee slots but that doesn't help MC firms if they lose loads of mid-level and senior associates as quality control and the issues highlighted above mean it's actually quite hard to find decent lateral replacements at that level. Also, losing up and coming people can trounce succession/continuity planning.

help MC firms if they lose loads of mid-level and senior associates

you seem to be under the impression that there is an unlimited number of vacancies at US firms.....

What Kamar said. MC people with some experience can try their luck in a US firm and stash the cash or go to Osborne Clarke and be happy.

We are not irreplaceable but we are harder and more expensive to recruit than many partners seem to realise.

The MC firms aren’t going to collapse but the easy ride they have had is coming to an end. Latham and Kirkland are spanking them in a few profitable areas already. 

And don’t forget the “partnership “ prospects are infinitely better at US shops . Kirkland making up salaried partners at as little as 5 years PQE or thereabouts, going in at 400/450k for 3 years whilst you being assessed for equity. Of course most don’t mAke it but so what? You’d have earnt approximately 3 mil and still be in your early 30s . Go and do something else or work for shoosmiths in reading doing 35 hours a week 

It is interesting that big4 NQs are paid nowhere near this - I get that they are different specialisms and fees are billed and structured differently but If you think about the big4 - both positions (generally) need a degree - both then have 3 years of training for an additional qualification - both require a high cailbre of grad and long hours and a “premium” brand. Big4 NQ accountants are on about 50k vs law NQ at somewhere like 80-150k or whatever number is being quoted above but then when you get to partner level the salaries are pretty comparable again. Especially first year partners where a big4 first year partner is likely out earning a first year law partner at lots of firms (Not at the US firms granted)

More fool accountants I guess. 

Beresford - people can go both ways. I suspect that there will also be a lot more people dropping down to lower level firms/going in house. The point is that, for most people, it's a case of either signing up for insane hours and pay or going in the opposite direction and actually having something resembling a work/life balance. What doesn't make sense is having the awful hours without the insane money. 

It's not really a comparison of law and accountancy, it's a comparison of law and literally everything else. Accountants salaries have stagnated with everyone else's over the last decade, what has happened in law is the freakish aberration. 

Sometimes I look at these salaries and the hours involved and I think, no way is that worth it. I have a life to live. Then I look at my job in the regions that pays a quarter of their gross pay, and I realise that I almost work these hours already and have no time for a life, so why the fook do I stick this out?

London accountants get less than that because to be fair a lot of their NQ's do stuff that's less taxing than being an NQ solicitor essentially punching data into models.  When I worked for a big 4 firm at that level a decade ago I got £35k despite having years of experience on the legal side of what I was doing in a big 4.  It's a very different market where there's much more pressure on fees for stuff like audit work although the smaller advisory arms of the business can charge some big fees.  A surprising number of accountants fail their professional exams at the first attempt which tells you something about the general calibre of their intakes.

Kamar nails it again. MC’s problem is it is neither fish nor foul.

20 years ago they paid the most. Now they don’t pay the most. They claim to offer better work (not really true and how many care?) and better work-life balance, but that’s infinitely better at Osborne Clarke and the money there is still good compared to what most make in the U.K. 

Pancakes I think the likes of CC take a couple of hundred trainees PA

That's right.  I started out in the City and moved to the silver circle doing big ticket commercial property work but got bored of the demands and the hours and these days earn as much as I did a decade ago but dealing with nice educated people buying and selling reasonably prime residential properties and rarely work after 6pm and don't have my days off disturbed by calls from the office.

Asimov I disagree . There is no job that pays its graduates as much . If freshies and others paid 60k for NQs they’d get thousands of applicants. By the way that’s what GS et al pay their graduate analysts . It’s all completely mad .

Sails you don’t really need money like the rest of us though. It’s not a criticism it’s just you can afford to trade off salary for a better job unlike most of us who are salary trapped. 

Banking pays its graduates more.  Law has always appealed to the people who want a safe steady career that doesn't have the mindset of culling people after one poor quarter and marching them out of the building moments after firing them.

FF might get lots of graduates but how one would they stay. Life at the MC can be really fooking shit. If the money is not much better why not go somewhere like Travers which is nicer generally?

What is IB money like these days? Used to be better than law. 

If freshies and others paid 60k for NQs they’d get thousands of applicants
 

This is true so why are they all in this big salary fight it’s nuts. 

Crypto I'm salary trapped as I have no savings left, a mortgage and can just afford to run what I've built.  I'm relying on my side investments paying off to get me out of this failing which once mum and dad are gone I'm selling up and moving to a three bedroom cottage with hopefully a bit of leftover cash to add to the retirement fund. 

I made the decision to get out long before I had any money in the bank and took a 50% pay cut initially as well because I left London having had my sanity ripped apart by a complete nutter of partner who'd left me sitting in a darkened office at night crying to myself.  It's pure chance that in the few years after that farmland doubled in value on a near annual basis.

The Big 4 is a good comparator . They haven’t barely moved salary bands from trainees in whatever, to director level in well over ten years.

trainee ACA in the London office of anyone of the Big 4 starts at 28, and on qualification is on 45 . How do they get away with it ? Because they receive tens of thousands of applications from really bright people, and they know most will leave shortly after qualifying, having had outstanding training with a huge brand name and can go anywhere with the shiny EY ACA or CFA badge .

law firms brand equity is a tenth of the big 4

Ebit they also run a totally different business where huge chunks of it can't justify the kind of rates solicitors charge for various reasons.  A big company isn't going to pay £300 an hour to have 50 NQ's spending weeks in its factories and warehouses counting widgets for an audit whereas on a big deal they'll only be paying for two or three NQ solicitors to work on it.  The advisory arms that charge big money are actually a very small part of the business of an accountancy firm.

I know it’s not the same but when I started doctoring just over a decade ago my wage was £34k which was for an average 48hr week including nights and weekends. I don’t know what it is at that level now but the unions say that pay hasn’t kept up with inflation. 

A median big4 ACA trainee is less bright than the median law trainee.

The IB banking equivalent one gets paid much less . 60k for a graduate analyst plus 50% bonus totalling 90. Once you reach VP which takes 6 years , start on 150-200 plus bonus of 50-100%. The difference is once you reach VP there is no up or out policy and you can pretty much do it for as long as you wish. At this level you manager and supervise analysts and associates and senior associates. More a quality control and project manager role as opposed to 18 hours a day fiddling with PowerPoint and doing the 100th version of a model. Sensible hours , leaving at 7/8 the latest , handing over the work to analysts and associates to do through the night .

im talking advisory like M&A , not someone trading on whatever desk where their bonuses can fluctuate wildly 

A median big4 ACA trainee is less bright than the median law trainee.

Simply not true. Do you mean city / mc law trainee?

Sails the advisory arm of the Big 4 is the biggest and most profitable arm …. Audit barely pays the bills

Vertigo you keep telling yourself that . Christ .

ebitda its prob harder to land a M&A role than a tc in a MC firm. 

Its very different now compared to 15 yrs ago where investment banks poached the best students. Tech Firms are right up there.

State of this thread. Is it 2006?

Sails not true a surprising number fail their exams . My cousin qualified almost 2 years ago at EY. 1 out of 145 of his ACA intake failed an exam once and he was gone , no ifs no buts , the big 4 are brutal about this . 
and the poor chap from PWC he threw himself of the 20th floor having failed an exam by 2%, poor sod .

sails the ACA and CFA are about a billion times more difficult than the LPC or BPTC for that matter 

The bit about the exams is true, but what i dont understand is how these M&A genius guys from the top 4 can constantly come up with such non workable BS and get paid so much for it. Then the lawyers are the bad guys when they point out the "deal" is impossible, or that the DD shows that its BS.

TPot, they only get paid if the deal crosses the line though? Most don’t.

This is not a lot of money in London with the loss of personal allowance, 40% and even 45% rates. I think people forget this.

I know a post like that is generally politically incorrect and risks one being labelled as "out of touch" etc., but is generally levied by the masses earning 30k a year in London, and lawyers who toil at 70k a year RPCs and Stephenson Harwoods.

In my view, undertaking such work is the definition of madness, but I appreciate others disagree.

20 years ago if you wanted top dolla as an NQ, it wouldn't be the US firms or the MC you'd head for, it would have been Gouldens (with the side benefit of the partner's unlimited tab at the pub down the road)

I don't know why anyone would want to work for the big4. their starting salary in 2003 was £24k and in 17 years its increased to £27k. Its awful, barely liveable. You'll need to live with mum or dad or rent a room in a HMO.

Indeed next stop , but it doesn’t tell the entire story . Those for example on the ACA program will be in class for 2/3 days a week for the first two years. So they are essentially getting paid to be students. But yes the movement in pay is shocking .

add into the mix the prospects of being made partner ,make being made partner in a law firm look east and straightforward. 15 years minimum please to be made up as a salaried partner at Deloitte in 200k

but law firms could learn a thing or two , paying trainees 40-55 is pointless and unnecessary.

This is similar to football economics. There is a small number of very able, very hard working and motivated people, and firms have to compete for them.

There is a large number of decent but not outstanding people, and a huge number of people of mediocre ability. But they are irrelevant if a firm wants to be the elite law firm in a high value area.

There are millions of kids keen to play for Man U, but the club will still pay a few an utter fortune to sit in the reserves, many of whom will not make it to the first team. Same model.

Ebit I worked at EY for a while and people in my team failed modules and were not fired.  Do it it often and it was frowned on but slip up a couple of times and nobody would bat an eyelid.

I did an internship a long long time ago and the steer was you'd be sacked if you failed an exam. Not know how that was applied

err sails how long ago was that can I ask? It must have been well over a decade ago, or you were in a shit team where no one cared. If you are on the ACA or CFA program and you fail one exam , you are gone.

100% ebitda, that is true. 

I'm not a lawyer.  My wife is.  I work with the big 4 regularly and have twice been offered roles in the big4.  Your run of the mill London big 4 audit trainee is less bright than a run of the mill London (not necessarily MC/white shoe etc) legal trainee.

I don't think this a controversial opinion among quanty/technical people like me.  Maybe I'm more impressed by wordsmiths.

I suspect some of these US law firms may well not be competing with other law firm at all for the brightest grads.

The median salary at Google and other tech firms is something astronomical. And there are obscure parts of the City that don't get much publicity so nobody knows what they're on.

The US Firms are elite legal practices. 

They ensure the highest quality, in the fastest times - without compromise. 

The trainees in these firms are not your churnmonkeys from Eversheds or DLA - they are working to 3 in the morning to ensure mistakes are not made, that every i is dotted and every 2 is crossed. 

It is absurd to suggest that there is a higher risk of negligence in this firms. 

Ebit I left there in 2012 because unfortunately the interesting advisory teams are also full of ex-bankers who are back stabbing unpleasant aunts.

Geoff just made me laugh outloud.

Escaping puppy you are talking the very top end of the profession. They probably get paid more than a lot of baby partners in the city and more than most senior associates outside of magic circle.

nothing elite about them, their precedent banks are rubbish and they will front that they have experience in work they cannot do. Geoff's been at the kool-aid. 

Geoff's post is a very sophisticated little piece of satire.

Hilarious stuff Geoff

Lawyers seem to lose sight of how well paid they are. 

- Humans are relative, not absolute, assessors. To a City lawyer there is thus a great deal of relevance in what colleagues, competitors etc are paid. And very little relevance in what the cleaner, a teacher, a social worker, a charity worker etc is paid. 

Why are certain denizens of ROF so obsessed with salaries?

And yes, Geoff’s was indeed a posting for the ages.👌

I agree. This average UK salary stuff gets trotted out but it's irrelevant. I'm not the average UK worker so why would I care?

Geoff, you're right about working until 3 in the morning but that's about it.

I've never worked on a deal with a US firm and thought there was anything particular impressive about them that makes them stand out from silver circle firms. Same with MC firms. The main difference is that they have got into a cycle of profitability and so have resources to throw at support. The lawyers are nothing special compared to other lawyers.

The most brilliantly intelligent lawyer I've encountered has been at a mid-market regional firm, fwiw.

And so it continues, CC yesterday announce upping their NQ salary to £125k, up from £ 115k in January, and £ 107k in the November before. They now match Freshies who recently increased their NQ salary to 125k.

That leaves  A&O and Links "languishing" at £107k, with Slaughters sitting in the middle at £115k. That still sees the so called MC firms about 40k less than their US counterparts, and probably nearer 80k when US bonuses take into account.  I can't recall what fuelled this madness, but the UK firms should stop hoping to compete with US firms on NQ pay. They can't and don't want to.

I have a question, does a Employment litigator , or commercial property/real estate NQ make the same as  NQ working in the PE/LEV Fin team?

Those firms wouldn't have employment litigators. Their employment teams would be satellite teams of the paper pushers.

@ Davos , so they don'y bring in Employment lawyers in M& A transactions at the appropiate point in the deal? They must have employment lawyers surely.

Ok would a commercial litigator or tax lawyer make the same?

Not sure how I could justify the spend of engaging with such firms.  That sad, I'm lucky enough to know lawyers who cost less but are just as good, if not better.  Just going to a US firm or MC based purely on reputation feels like a bad business model and therefore tends to be on an exception basis.  But then I doubt my company is their target market anyway!

"That still sees the so called MC firms about 40k less than their US counterparts, and probably nearer 80k when US bonuses take into account"

Er...Most of the US firms are paying 140-150k. So it's er....15-25k difference. Actually, it's not even that, because of the 100-125k tax trap which you can postpone to c.132k by putting in the 40k tax free pension limit assuming a 5% employer contribution, so the 135-160k bracket is taxed at c.60%.

Also the bonuses at the MC are similar to some US firms now, but target is 1800, rather than 2000:

NQ: 125,000 + 13,000
1PQE: 130,000 + 18,000
2PQE: 140,000 + 38,000
3PQE: 150,000 + 56,000
4PQE: 160,000 + 84,000
5PQE: 165,000 + 102,000
6PQE / senior associate: 175,000 + 116,000

And if you're in an advisory / litigation area, you're going to be getting better work regardless, and probably safer too. There's also probably better career progression, and whilst the fight to become partner is bad everywhere, US firms thrive off big name lateral hires than endorsing a culture of making up routinely internally. One can dream of making partner at Slaughters; I know a guy who didn't/couldn't after 7-8 years and went off instead to become partner at Willkie Farr.

Hi Biggie US firms are paying 140-165 plus bonus.

And big lol that MC bonuses are anywhere near what Kirkland et al pay. An acquintance left Freshies, moved to Debevoise and then Simpson, and the bonuses were three fold what he got at FBD.

Another moved from CC to Skadden and again bonuses were three fold more than CC

And Kirkland has the shortest partnership track - salaried at 6 PQE. I know loads of senior associates at MC firms, and they are not getting bonuses of 116k , not one of them

Suggest you re-read post.

K&E partners are not partners. K&E is not all US firms like Ropes, PH, Weil etc.

ok biggie. i meant salaried partners