A&O Shearman poker

Surely A&O Shearman will raise before Slaughter and May, unless there's a plot twist [RollOnFriday called it correctly - see UPDATE below*]


Clifford Chance has raised the salary for its NQs to £150,000, copying the recent rises by Freshfields and Linklaters. 

The increase, backdated to 1 May, represents a 20% uplift from Clifford Chance's previous NQ salary of £125k. As well as putting it on a par with two of its rival Magic Circle firms, it also matches the likes of White & Case and Cooley. 

CC has also matched Linklaters and Freshfields in boosting trainee pay from £50k to £56k in year one, and from £55k to £61k in year two.  

Freshfields set the NQ pay benchmark at £150k at the start of this month and Linklaters swiftly followed within a couple of weeks. RollOnFriday asked CC on both occasions if it was planning to match the rises. The Magic Circle firm was unable to confirm, at the time, other than to say that it usually publishes salary rises in June. By bringing the salary rise forward to this month instead, there must have been frantic calculations by the CC bean counters behind the scenes, as to how quickly the firm could match its rivals.

Last week, RollOnFriday's betting boffins called it correctly, in predicting that CC would be the next Magic Circle firm to raise NQ salary to £150k. And in a poll, readers just about agreed, as 51.5% also opted for CC. Close behind, 46.5% thought it would be A&O Shearman. While a mere 2% went for the outsiders, Slaughter and May:


Results of last week's prediction poll:

Poll results

The news of the rise at CC has presumably gone down like a turd sarnie with HR teams at A&O Shearman and Slaughter and May.

RollOnFriday sticks with its prediction, that A&O Shearman will be next to follow CC, as the newly-merged transatlantic beast will undoubtedly feel the pressure to compete with the rest of the Magic Circle to entice junior talent. Putting the raise off for too long is probably not helped by the fact that Shearman NQs in the UK used to be paid a similar wedge of £145k pre-merger. [RollOnFriday called it correctly - see UPDATE below*]

Meanwhile, Slaughter and May has traditionally been the least susceptible to peer pressure. In the last round of pay rises, the firm held out the longest, only matching its rivals to increase NQ pay to £125k in November 2023, over a year and a half after the first Magic Circle firm, Freshfields, had offered that figure. And the firm prides itself in offering a different pay structure to the other MC firms, as associates don't have billing targets, and they move through the salary scales twice a year (with bi-annual pay reviews in April and November).

Meanwhile, playing NQ salary poker on another table, Pinsent Masons has raised NQ salary from £92k to £97k in London (and from £61k to £63k in the regions), leapfrogging over the likes of Bird & Bird and Dentons (£95k), and just a smidge below firms such as Taylor Wessing and DLA Piper (£100k) in London.

At the highest-stakes table, playing with golden chips, Quinn Emanuel recently increased the salaries of its NQs to an eye-watering £180k, matching Gibson Dunn.

In the latest comments from the in-house lawyer survey, a number of clients said that they want junior lawyers' salaries to stop increasing, as they believe the cost is being reflected in their invoices. One GC in a bank said: "Stop the salary inflation. If you want to pay your associates huge salaries, take it out of partner remuneration."

If you're in-house, what do you think of the salary rises? Have your say in the survey below.

UPDATE: After publication, it was revealed today that A&O Shearman has finally succumbed to the mounting pressure and will also pay its NQs £150k, leaving just Slaughter and May as the only MC firm still playing its NQs £125k. 
 


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Comments

Not again! 31 May 24 08:54

I couldn’t give a rat’s ass about NQ pay at London firms.  These stories are mind numbing.  
As are the comments about NQ’s not being worth ten bob and how back in the good old days NQ’s were paid in lumps of coal.  Incoming! 

Try harder/must do better. 

CC alumni 31 May 24 09:01

CC is a dying firm - hierarchical, subpar practice, shabby office. Many of us have quit to work at US firms. 

 

John 31 May 24 09:19

Every penny you earn, or receive in dividends, over £125k should be taxed at 90%. It is obscene that people are earning these sums (a drop in the ocean compared to partners), while hospitals are at breaking point and thousands are homeless. 

Anonymous 31 May 24 09:39

More band compression. At this rate it'll be NQ salaries at £150k and 3 years PQE £152k...

@31 May 24 09:01 31 May 24 09:41

A dying firm...with PEP at £2m (about double what it was a decade ago), a brand new office being planned in the City of London, and instructions from both UK blue chips AND shiny new PE firms (apparently including EQT as of a couple of days ago). I appreciate that the favourite pasttime of lawyers is slagging off other law firms, but at least try to make your criticisms sensible.

(and FWIW I work at a direct competitor of CC and think there are quite a few valid criticisms of them which can be made. But "dying" and "subpar" are not words anyone reasonable would use to describe them)

Autistic AG Partner 31 May 24 10:06

No surprise Addleshaw Goddard LLP are mentioned here, we are a sophisticated country club ran by business men, the likes of Pinsent Mason and DLA Piper are doss houses run by little girls 

@ Anonymous 09:39 31 May 24 10:17

There is still 7-8k between PQE levels (as there always has been) and high-performing senior associates can now get massive bonuses (80-100% of salary). 

So your criticism simply ain't true. 

Long John Head Gone 31 May 24 10:34

@9.19 

They are having to raise salaries to keep people doing the job, which is brutal. If you want to tax more then no one will do the job and the UK will lose key tax revenue as an industry collapses.

UK is one huge bucket full of crabs

Band compression 31 May 24 10:38

I understand the frustration of band compression, particularly if you're more senior and haven't had the benefit of these recent hikes. But if I were starting out now, I'd happily trade larger pay jumps as I moved through the bands at 3-6 PQE in return for a much higher starting salary at the NQ stage now. You're effectively front loading the comp and normalising it over time with smaller pay jumps. 

That feels like a good deal as it gives you more cash at an earlier stage, which you can invest (compound returns?) or apply to a house deposit sooner rather than later.

OK, sure it's a bit galling to be 5 PQE and only getting paid £30k more than the NQ that's got his hand trapped in the printer again, but it's objectively tonnes of money.

 

Shut-in Weirdo 31 May 24 10:53

"A dying firm...with PEP at £2m (about double what it was a decade ago), a brand new office being planned in the City of London, and instructions from both UK blue chips AND shiny new PE firms (apparently including EQT as of a couple of days ago)."

Ah! Actually, what you haven't understood is that it is a dying firm because it is run by dinosaurs who think that people being paid close to two-hundred large can be obliged to come into the office on multiple days per week.

Those bozo's, who are so dumb that they have been promoted above me to roles that pay over a million a year, haven't understood the New Normal of the future in which shining minds (like me) are left alone, never having to speak to anyone, doing what we self-identify as Our Best Work, in our pants, at home. Every day. 

CC's failure to embrace tomorrow's idea today by giving me everything I demand, its insistence on blindly pushing the mad anachronistic idea of people coming to the same place to work in teams together, and its polite refusal to deify extreme introversion as a 'neurodiversity' and to treat it like an absence of essential interpersonal skills, is destined to be its undoing which is why it is due to fail imminently. 

Just a year after I last predicted its demise.

Confused 31 May 24 13:21

I’ve never understood why it’s become the trend to increase NQ salaries to insane rates then bunch all the associate bands at UK firms. Surely your senior staff with expertise and additional value to offer clients are the ones you want to pay more handsomely and NQs would be happy to take less knowing what awaits them.

Anonymous 31 May 24 14:00

The next time punk young lawyers complain about stress and work, remember they brought it on themselves.

Anonymous 31 May 24 14:43

What about all the other people within the firm? PAs/business support/IT/finance/HR etc? The cost of living has really hit home for many of us.  When will these law firms recognise our hard work and contribution towards the business?

Anonymous 31 May 24 14:56

Why are trainees getting paid more than PAs? Most of them can’t even wipe their own entitled arses!

Anonymous 31 May 24 16:20

"When will these law firms recognise our hard work and contribution towards the business?"

When you aren't immediately replaceable by a long line of equally well qualified* applicants lining up outside of the building?

If you want the big lawyer salary then you can go do the undergrad degree somewhere shiny, then stick out the grinding process of law school and oversubscribed TC application process, and then two years of getting figuratively and literally schlonged by everyone else in the building** while you qualify. Just like they did.

Or, if lawyers are uniquely mean with cash and undervalue you, then you can go earn the big bucks for whatever it is you do that isn't making nice PowerPoint presentations in a, I dunno, Big Dairy Farming Corporate or something.

So many choices!

 

 

 

*in many cases this means equally unqualified

**in fairness to Business Development people, they also seem to get literally schlonged by everyone in the building too. But they seem to enjoy it so idk.

SM 5PQ 31 May 24 16:45

SM is having its quarterly meeting with Associates next week and some brave man has just today raised the issue of payrise matches to be covered at next week’s meeting.

Let’s see who blinks first. 

PW associate (ex-CC) 31 May 24 17:07

50% more £££ working 20% more hours so why not. MC firms are officially dead. 

Contributor Editing 31 May 24 19:27

I’m intrigued as to what US firms around that pay package are going to do. We’ve all discussed W&C and Shearman, but what do you do if you’re Dechert, Jones Day, Covington or Cooley in London (all around the £145k - £150k mark I believe)? Some of these firms have PEP that’s not much more than the MC but have historically paid 20-30% more than MC. However, I just don’t see them going wild and joining the most profitable firms like K&E and Latham at £180k.

Do they just stay put, or do they find a middling ground at £165k?

Muppets 01 June 24 08:49

We’ve all been there and know that NQ’s know nothing. So why not do away with them. 5PQE lawyers who only cost £30k more are worth 3 times as much. Just employ 5PQE. Simples. 

Ps - GCs moaning about bills are the real muppets. Stop paying for kids to learn to wipe their own backside if you aren’t happy with your bills. It’s a big market. 

 

@9.19 01 June 24 08:52

Lovely lefty view. 

The reality is of course that no one would work with 90% tax. Absolute idiot. 

He is no doubt one of those people who moans that tax breaks only favour tax payers. Think about it. 

Anonymous 01 June 24 13:42

Anonymous @ 14.43: Business services roles are never given the same treatment firm-by-firm but across the market they’ve already risen massively. Kids only a year or two into their careers are now on 40-50k, middle managers with limited responsibility and who don’t generate any revenue directly can now easily get to 100-125k, the C suite are being given partner titles at some firms with remuneration packages that are higher than plenty of junior partners in the city (and certainly the regions!) are making. There’s the odd firm still paying at the rates of 5 years ago but it’s mostly been a boom for business services and lateral moves are extremely easy to come by.

Anon 03 June 24 15:52

A lot of the US firms like Skadden, Weil and Goodwin are now 175k for NQ and 340k-350k for senior associates (plus bonuses that are six figures). It’s when you get to senior associate level that the magic circle really get left behind. 

Anon 05 June 24 18:31

Given that PEP has been on a steady rise over the last 15 years, there is good argument to say that all should share in those rises. (MC PEP hit £1m around 2008 and is double now, and these figures seem to bear out that trainee pay has at least doubled in the same period - in fact probably £65k to now £150k.)

Nevertheless, in the big picture for society/economy there is something amiss. Average trainee needs to be smart and have a plan to take the cash for a period and then get out. Otherwise, in the future, there are ripe pickings here for all the lawyer-therapist service providers helping those “stuck in law” - caught by the salary, title and lifestyle but with a sad realisation that their role and skills are overvalued (and perhaps only valued in the square mile); cue quiet a bit of self-loathing for some….

What the country needs is great and well-paid engineers, doctors, carers, etc? FT article on this had flaws but made a basically good/fair point.

Anon 4321 05 June 24 20:00

Such a waste. First by the firm, then by their clients.

If someone told me this was about war for talent, I'd change my view. Its instead abour keeping up with Jones or rather Uncle Sams.

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