Mo' money, no problems
MoFo is increasing NQ salary to $202,500, which works out at around £147,000 - a whopping uplift of almost 25% from the previous salary of £118,000.
A MoFo spokeswoman said the "dedication and hard work" of their lawyers had "played a key role in our London office’s sustained growth over the past five years". She added "to continue on our trajectory, we are keen to ensure that our associates and future recruits are compensated in line with our top competitors.”
The San Francisco headquartered firm recently raised trainee salary from £46k to £50k for new starters, and from £50k to £55k for second year trainees.
Cleary is upping its NQ salary from £133,000 to £140,000. The New York headquartered firm has also wasted no time in matching Davis Polk's trainee salary, as Cleary will pay its first year trainees £57.5k, up from £50k, and second years will be paid £62.5k, up from £55k. Trainees at Cleary and Davis Polk will now share bragging rights as being the best paid in the City.
The NQ £140k+ club is a US-only affair, whose members include Shearman & Sterling, Debevoise & Plimpton, Latham & Watkins, Milbank, Akin Gump, Simpson Thacher, and Kirkland & Ellis. Not everyone has joined, and it remains to be seen how quickly any of them will catch up to Vinson & Elkins, which boosted NQ salaries from £147,500 to £153,000 in June.
In the tier below, another pay war has emerged. Last week, Allen & Overy matched Linklaters after its Magic Circle competitor raised the base salary for newly-qualified solicitors to £107,500 earlier this month - both firms have now raised NQ pay twice within a matter of months. Although they are remaining tight-lipped at present, the rest of the Magic Circle will surely follow suit. Slaughter and May, Clifford Chance and Freshfields all currently pay NQs a salary of £100k, and none will want to give the other two bragging rights in a hot market for junior lawyers.
The gulf in pay between firms is widening so much, that some partners in regional practices may reflect that a NQ at a US firm, who would have been in nappies around the time they qualified, is now earning considerably more than them, with just two years' training under their belt.