With take-home pay of around £75k after tax, six Clifford Chance NQs could club together to own this home outright, with some money left over for a front door and windows.
In the latest round of the City pay war, Clifford Chance has boosted NQ base pay to £125k.
Clifford Chance's NQs were previously on a base salary of £107,500, but the firm will raise the figure to £125,000. The rise will take effect from this month.
CC's uplift mirrors the recent hike by Freshfields. The rest of the Magic Circle pay their NQs £107,500, excepting Slaughter and May (£115,000), although surely the others will now follow suit rather than allow bragging rights to their competitors.
The rise still puts Clifford Chance beneath the highest paying US firms in the City, such as Gibson Dunn, Goodwin Proctor, Fried Frank and Davis Polk which spray their NQs with a base salary of £160k+. Kirkland & Ellis and several more US firms are understood to pay in the same region.
In other salary news, Mishcon de Reya has recently announced it is raising its NQ base pay from £83,000 to £90,000, effective from 1 July.
The rise puts Mishcon's NQs on a par with Stephenson Harwood and Ince, and a smidge above firms such as Bird & Bird (£88k). In the bracket above, the likes of CMS, BCLP and Norton Rose Fulbright all pay their NQs a base salary of £95k.
“We keep compensation under constant review at Mishcon de Reya," said a spokeswoman for the firm, "and, in this particularly buoyant market, want to ensure that we do all that we can to attract the best talent and to reward our people for their continued contribution to our firm.”
So, this is very interesting.
Just announced at a Town Hall that a 5PQE lawyer that does 1900 hours and gets marked as making an "outstanding contribution" will get a 145k bonus next year, on top of what I assume will be a salary of around 165k. That's not far off US money.
Huge ratings to Freshfields for kicking this off and leaving MC firms with no choice but to dig deep and offer juniors similar money post-tax to US counterparts.
125k with MC level of trainee development, MC quality of work and a (somewhat) better work-life balance seems more enticing than most US firms at 140-150k with 4 trainees and a 9-11pm lifestyle...
Is Kennedys the only firm in the whole wide world refusing to raise salaries? WTF?
"and gets marked as making an "outstanding contribution"" --> and that's why this is similar to, but not really the same as, US pay.
If you're a Freshfields 5PQE that doesn't get the bonus after doing 1900 hours - you're an underpaid mug.
Any slaughters associates know whether the twice-per-year bonuses come close to closing the 10k NQ gap between SandM and CC/FF? I saw others suggesting it was just the normal bonus but paid out in two installments rather than one.
Perhaps, though you would still get the "billable hours" contribution element of the bonus. It is not clear how the 145k is split between "billable hours" contribution and the non-billable contribution.
Also, at a US firm if they think you're rubbish you'll presumably get shown the door. Whereas at CC you could float along and still pocket 200k+...
It amazes me how much rabbiting these NQ Salary threads attach.
What could you all possibly have to say that you didn't get out of your systems on the last dozen occasions?
@10.49 lol! Whereas at CC you could float along and still pocket 200k+...
And their support staff get a 1k pay rise.........
@11:01 It amazes me how much people gripe about the interest in salaries.
If you're not interested, may I suggest you don't read them?
Lol I think it's pretty telling the lack of interest in MdR's pay rise - severe bunching above NQ and so many colleagues with CVs out to escape before ladder is pulled up...
Mishcon is now the highest paying West End firm.
This is really great for the Magic Circle advisory associates. Not that their lives are stress-free or they're leaving at 6pm everyday but they're generally not pulling the hours that transactional associates are (PE, M&A, Lev Fin etc).
If you're in a transactional department, I'd still go for a Cravath-scale US firm (as someone who made the jump from an MC firm). Despite the propaganda, the hours are the same (ok, maybe not at Kirkland...) and you're guaranteed the higher pay (and much higher bonuses) instead of relying on goodwill bonuses from MC partners.
And the key point is that, unless something major changes, the US firms are just going to become bigger and more entrenched and dominant in the key transaction spaces in London. The MC will still be excellent firms but not quite at the top.
Sure, if you are an NQ - 2 PQE PE lawyer it is probably still better to be at a Cravath-scale US firm.
This does make it significantly less appealing as a mid to senior level associate to make the jump though, if your doing good work and have progression prospects at your current firm.
@13:13 I don't think so.
Gap in pay between MC and US actually gets even wider as you go up in seniority (there's a reason MC don't publish pay scales)Z
It's also easier to get the partner title at US firms (whether they mean the same thing will vary firm to firm).
Honestly MC firms are so overrated - you can cruise along if you know who to hang out with, and get promoted to SA and counsel easily. Don’t get me wrong, there’re exceptional lawyers at MC firms, and they’re the ones who make it to partnership (but more likely get poached by US firms and make partner).
The overall quality in US firms (the one that pays good salary, not Bakers/Jones Day) is much higher. Everyone in my team is just amazing (including the associates from overseas). You don’t find such quality associates across the board at MC firms. Partners at US firms are also more driven, and there is no free-rider or shirker here.
I do however think that you get better training at MC firms. But after NQ, US firms are just as good in terms of professional development.
Under new pay structure, a top performing 5PQE at CC gets 310k total comp next year (165k salary plus 145k bonus). From my discussions with recruiters, total comp for a 5PQE at a top Cravath scale US firm in London is unlikely to be much more than 5/10% more.
Might be easier to get salaried partner title at US, but likely harder to get an equity partner title which actually matters, and much more likely to get chucked if you underperform.
US firms recruit plenty of junior and mid level associates from average mid tier firms, its clear that quality is not higher.
We aren’t happy here. Sort it out Nick and get us paid some decent cash or watch the door spin as we exit.
If true, £310k is an astonishing amount of money for someone in their mate 20s/ early 30s! A 5 yr pqe in Bristol will be lucky to earn a quarter of that (gross). Obviously the hours and expectations are very different, but that is a world apart.
It's not really close to US is it - I am happy to be proven wrong but I imagine this 145k bonus reflects the theoretical and the amount that will be paid out in reality even to the top performers will be much less than this.
Even taking it to be true, the comparison is 165k base (so still about the same as a US NQ) + a bonus figure which involves (1) billing the same if not more than a US firm to hit the billable component (don't believe the lies kids, 1,800 to 1,900 even in a US PE practice in the market of the last 2 years was the average) and (2) whatever "outstanding contribution" means - you can bet the firm will be using every excuse to say you've not maximised this because of training, knowhow, junior development or business case or X.
That's nearly 50% of salary which is contingent/not guaranteed and which you'll only see in one lump sum at the annual bonus payday - not great for cash flow.
The equivalent at a US firm for 5PQE is pulling about 265k base (potentially more for those adopting a spot FX rate as the sterling has and will continue to tank) + c. 85k year end bonus (not including any special bonuses and potentially more for those firms which pay an hours-based multiplier - and no, this does not require 3,000 hours). At most firms, there isn't any bonus ineligibility either. So long as you're at the firm, you will get the full bonus (and don't believe the lies that the US firms are more cutthroat and get rid of people that easily - it's quite hard to fire anyone these days simply for underperformance).
The point is that at MC a large part of the package is a bonus and therefore not a sure fire thing (unlike US). If you genuinely think that most 5PQE at CC will get that - you're dreaming. I wonder why CC won't publish the figures like cravath.....
Equally as hard to get equity at US or MC. Reality is it's much easier to make equity elsewhere if you've had a few years of the partner title - which is easier to get at US.
The idea that US are hiring less quality candidates than MC is hilarious (and exactly what MC want you to think). Truth is in transactional areas there's a dearth of quality candidates.
I'm on 70k as a legal director.
FML. Should've gone to London.
To the US trainee / junior posting emphatically above, kindly stop chatting bollocks.
Everything ain't made equal. Yes, comp is better at US firms; point is that base isn't massively far off, and bonus will compensate somewhat maybe, and yes, the MC will still be off. Getting stiffed on bonus is obvious.
But you've also got to take into account tax. If you run the net figures with pension mitigation, there's precious little difference in many US firms paying the 140-150k figures to their NQs (which are pretty much all of them outside of K&E, Akin, Gibson and maybe a couple more). The difference between a 1PQE at base at FBD and a 1 at Cleary, W&C, Debevoise etc. is about 6k assuming you've maxed out pension at each. Even a K&E 1PQE earning top of the market (maybe there's 175k now) is going to have an 18k odd difference in base which, whilst it's definitely making the sucker or two in the comments hard as a rock, ain't much really given the additional sweat forcibly extracted from you for that extra $.
You probably will work longer hours in a US firm than MC. Not much, depends on the team and the firm. But US firms are predominantly transactional with advisory teams as effectively skeleton crew back office support, so for MC advisory associates doing litigation or fin reg etc. who will typically have more balanced and predictable hours, it's a v good proposition.
As to the horsecocked statement about partnership, it totally depends on the firm, practice and individual, but it's not true as a proposition to say it's "equally as hard". Plenty of US firms rely on big balls laterals rather than making up their own, some firms make some people up but toss the bulk of people out as their become more senior and therefore more expensive. K&E hand out partnership titles like candy but outside of them, it's not "easier" to get the partnership title - actually I'd hazard to say K&E hands out out most of their partnership titles to lateral associates from MC etc. firms. There are firm querks. Yes, if you are a 5-6PQE at CC, and you know the decision makers, you know your competitors, your prospects etc. then it probably does make more sense to stay rather than pivoting to a US firm for some more $, but an unknown future.
There's no unequivocal statement you can make - yes, at US firm you might make a tiny bit more, you might make quite a bit more; you might work about the same; you might work many, many more hours; your partnership prospects might suck, but they might also be alright; you might be working for little Hitlers, you might not. It's almost as if your mileage may vary....
Unclear whether the Slaughters bonuses will bridge the gap. When asked at the firm-wide address, the partners were very coy about it.
Some legend did explicitly say to the partners that the normal bonus split in half wouldn’t be good enough, so they are aware that we will be watching the June bonus very carefully.
You would hope that two bonuses a year should actually take NQs past 125k … but with these partners you honestly never know.
Perhaps we will all be surprised and Slaughters will raise to 125k. There was definitely an impression that the partners assumed no other MC would match FF. This will be a very interesting few months.
“Anonymoose 27 May 22 10:16
So, this is very interesting.
Just announced at a Town Hall that a 5PQE lawyer that does 1900 hours and gets marked as making an "outstanding contribution" will get a 145k bonus next year, on top of what I assume will be a salary of around 165k. That's not far off US money.”
Yep so basically, Freshies and Cliffords have near equalised the pay for core corporate (particularly PE) and finance associates who are most at risk to being lost to US firms. They are the ones most likely to achieve the high hours and contributions.
It creates a little bit of a two tier structure within the firms, but then that seems fair as the advisory associates simply do have a better time of it.
Probably will help retention, as it will certainly put off a good number of associates thinking of making the leap across to US on a purely hours basis.
The long term fix though is that they need to raise trainee numbers again. The short termist slashing of trainee numbers in 2012-16 led to the current shortage of mid- and early senior associates
Cravath 5PQE base is 370k USD. That's roughly 295k GBP, so close to the max CC package incl top bonus for a few select associates... Might want to consider talking to a more competent recruiter.
There's still a significant salary gap.
It's fixed. You get a set amount if you hit 1900 hours and a set amount if you're marked outstanding impact. If you are both and are 5PQE, you get 145k. If you do 2000, you get even more.
The US firm model is unquestionably better in every respect, in particular around pay and bonuses. MC firm partners regularly come up with excuses to mark you down so that you don’t get the top bonuses - I can guarantee that only the top 1% at CC would get that kind of bonus. For the rest of 99% - they’ll be having their Pret sandwiches and subscription coffee, accepting defeat that they’re paid 60% less than their US peers.
It is very true that US firms have succeeded in attracting top talents in this market. I suggest that MC associates cease mastur*ating over the “Band 1 ranking” on legal directories - they are determined based on history of the team in the market and also team size (and therefore deal volume) - not an accurate reflection of US firms’ success. The insidious ambush of A&O/Links/Freshfields’ levfin and insolvency team by US firm is a fitting example of this, where the rankings are complete bollocks.
What I would like to know is how many associates who make it past 5PQE are likely to end up remaining on such a high pay scale, without burning out. What is better - earning 200-300k (with a bonus) for a few years and burning out, or consistently working reasonable hours for more moderate pay, over a full 40 year career. I'm turning 40 now and chose a smaller firm in my late 20's with less pay. Many colleagues who were grinding too hard ten years ago are simply not practising anymore. The profession needs to look at sustainable careers, which can also be a sound business model.
Your numbers are way off for 5PQE mate. The Cravath scale is here:
Interesting. Would be curious to hear about the situation once bonuses are announced.
If Links and A&O match the 125k, I wonder if Slaughters will be forced to match, and if so how that will affect the newly upped PQE bands
18:19 is spot on.
A lot of people don't understand the US comp model and in particular bonuses: at US firms, the bonuses are larger AND much, much easier to get (I say this as a former MC SA). There's none of this discretionary nonsense. So the comparisons between MC and US base pay miss that almost everyone at a US firm will be getting a bonus of some sort.
Obviously overworked and annoyed they made the switch to a US firm at just the wrong time, now he’s doing crappy simple work all hours for ‘Murican clients in a Band 3 ranked team…
OK this is a lesson to all law students.
Get the highest A level grades and attend required best unis.
Then sell out to the highest bidding law firm in London.
In the regions there's paralegals earning under 20k and partners on less than 100k.
Numbers are not "way off". Source: my contract.
A 5PQE at CC will get an 80k bonus for hitting 1900 hours without partner discretion. The remaining max of 65k is based on non billable contribution and is therefore discretionary. Seems it will br based on appraisal.
So if you hit 1900 hours compensation is 245k plus a discretionary bonus. Really not that far off Cravath scale.