Bakers joins in the fun
Baker McKenzie has increased its NQ salary to £110,000, leapfrogging over Linklaters and Allen & Overy.
The firm had raised its NQ salary from £90k to £105k in March 2022. And the boost of another £5k to £110k (effective from this month) means that Bakers will now pay its NQs a higher base salary than Magic Circle firms Linklaters and A&O.
A Baker McKenzie spokesman told RollOnFriday that there would be rises "across the board" as "the increase to the NQ salary has been reflected throughout the fee earner levels".
Baker McKenzie's London Managing Partner, Ed Poulton, said that firm believed "in rewarding in a fair, consistent and competitive manner," and that "the attraction, retention and development of our people is key to the success of our firm and is at the heart of our strategy."
CMS is also raising its NQ salary by £5k, from £95,000 to £100,000, effective from this month. Other firms that pay their NQs the same wedge include Travers Smith, Macfarlanes and Simmons & Simmons.
Against the background of the war for junior talent, Allen & Overy recently told its lawyers that the firm was freezing associate salaries. And Linklaters also sent an internal email to say that it wouldn't "rush into matching salaries at NQ level."
A&O and Links' NQ salary of £107,500 is hardly a paltry sum, but it is less than their Magic Circle competitors pay at that level. Slaughter and May recently raised its NQs base salary to £115k, while Clifford Chance and Freshfields hiked to £125k. And Silver Circle firm Herbert Smith Freehills announced last week that it is raising NQ pay to £120k, leapfrogging A&O, Links and Slaughters, in the process.
Playing chicken in a different field, Akin Gump's NQs in London are now paid a whopping £179k*, thanks to the FX rate moving in their favour, as the pound has weakened against the dollar. Sir Nigel Knowles of DWF should be dusting off his "sticking plaster" speech in response.
The biggest salary hikes across the City this year have been prompted by US firms seeking to match or outdo each other across the pond, with the so-called Cravath salary scale adopted by some BigLaw firms, then being converted to sterling salaries in London.
There are of course a raft of US / UK firms where the UK office pay is disconnected from US salaries. For example, Baker McKenzie has matched the Cravath scale for associates in the US, putting their US NQs on a salary of $215k; but it doesn't pay its London associates using the same scale. So, based on the current FX rate, Bakers NQs in the US are paid around £70k more than their UK peers.
But when comparing salary across the legal profession, spare a thought for the poorest end, where "undervalued" Criminal barristers have felt compelled to strike over pay.
*Don't be shy, tell RoF if your firm pays its NQs as much as Akin Gump.