Another US firm aims for the £160k mark
RollOnFriday understands that Skadden has raised its NQ salary in the UK to £157k - although the firm has yet to confirm.
A source told RollOnFriday that the firm has "matched the new Davis Polk scale", not just in the US but in London, too, where the "new NQ rate is £157k backdated to 1 Jan 2022". Skadden has been contacted for comment.
Meanwhile, Dechert has lifted its NQ base salary in London from £125k to £140k, with effect from January, not including a discretionary bonus. Trainees at the firm are paid £50k (first year) and £55k (second year), so that's a leap of £85k on qualification.
However, in common with lots of firms, salary stutters a bit post qualification thanks to the pay war's focus on NQs, whose salaries are widely published. Dechert's 1PQE lawyers are paid £140k (the same as NQs*), 2PQE lawyers are paid £145k, while 3PQE lawyers are on £160k.
Dechert is not alone in condensing the pay rises after the initial NQ splurge, and the world's smallest violin would probably accompany any 3PQE lawyer who might moan at being paid £160k plus bonus. But in the RollOnFriday Firm of the Year 2022 survey there were some senior lawyers across firms, complaining about rises in junior pay not being reflected in higher bands.
"Pay is great if you are a junior but the gap between newly qualified and senior associate pay is becoming extremely narrow," said a senior lawyer at Herbert Smith Freehills. "Senior associate salaries haven’t risen in line with the (ridiculous) junior salaries," said a Clifford Chance lawyer, "meaning that I’m earning only a few £K per year of expertise more than an NQ." A Dentons senior lawyer said salary at their level was "squeezed whilst big pay jumps are seen at the junior level".
Chris Field, a member of Dechert's London management committee told RollOnFriday: “We remain focused on attracting and retaining the highest quality talent to provide our clients with innovative and excellent service. We believe that the combination of our firm culture and competitive, performance-oriented compensation packages offers a compelling proposition.”
The pay rises come at a time when Dechert posted global revenue of USD1.341bn for 2021, a 25% rise from the previous year, with profit per equity partner at USD4.231m.
Dechert's NQs will be on the same salary as White & Case. And the firm joins the £140k+ club of US firms including Willkie Farr, MoFo, Cleary, Ropes & Gray, Weil, Shearman & Sterling, Debevoise & Plimpton, Latham & Watkins, Milbank, Akin Gump, Simpson Thacher, Kirkland & Ellis, Milbank, McDermott Will & Emery, Vinson & Elkins (£153k) and Fried Frank (£160k).
Taking up the plushest seats in the club, Goodwin Procter pays its NQs a base salary of £161,500.
But not everyone is convinced that the huge pay rises across the City are a good strategy. DWF's CEO, Sir Nigel Knowles, recently spoke out against spraying junior lawyers with cash, saying that “offering more and more money to young people is only a sticking plaster." And that such hikes are "not a sincere, sustainable or healthy solution for anyone," he said.
And Charles Russell Speechlys (that pays its NQs a salary of £68k) told RollOnFriday earlier this month that its approach was "not to make knee jerk reaction changes in response to these unprecedented labour market fluctuations, driven by US and Magic Circle Firms".
Is your firm raising pay by huge amounts, a fraction, or not at all? Get in touch.
* N.B. Dechert only accepts September qualifiers, and so the firm's NQs will be on £140k from September to December and then the following full 12 months as a 1PQE. So qualified lawyers will spend a maximum of 16 months before getting some sort of pay rise, not 24 months (and it could even be less than 16 months, as the firm reviews salary bands every year).