Freshfields announced in February that whilst lawyers would once again start moving up the bands each year (after a year's freeze) the bands themselves wouldn't be increased. Linklaters promptly jumped on the same bandwagon.
However Clifford Chance broke ranks to announce that it would be upping its bands (yay), A&O then followed, and this week Slaughters joined them. And when Freshfields associates were given their new figures this week, they were surprised to find that NQs would be paid £60k rather than the £59k they'd been promised, 1PQEs would get £68k rather than £66k and 2PQEs £75k rather than £73k. A spokeswoman for the firm said "we think it is right to return to normal salary progression this year. We are now seeing high levels of activity and our associates have worked very hard to help our clients and the firm through the challenges of the last two years".
The increases are not huge and, in Slaughters' case, they are generally slightly down on the rest of the Magic Circle, even though the firm has done better out of the credit crunch than anyone else. The figures for the Magic Circle now stand as follows:
| Salary (£,000) |
1st Seat |
NQ |
1PQE |
2PQE |
3PQE |
|---|---|---|---|---|---|
| Allen & Overy |
38.0 | 61.0 |
68.0 | 74.0 | 85.0 |
| Clifford Chance |
38.0 | 61.5 | 68.0 | 72.3 | 84.5 |
| Freshfields |
39.0 | 60.0 | 68.0 | 75.0 | 86.0 |
| Linklaters |
37.4 | 61.5 |
68.0 |
73.0 |
85.0 |
| Slaughter and May |
38.0 | 61.0 |
67.5 |
72.0 |
82.0 |
A spokesman for Slaughters told RollOnFriday that the firm reviewed salaries every six months, unlike most competitors which reviewed them anually. So although staff may be underpaid at the moment, they should be compensated later on in the year.
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A Slaughter and May lawyer hears of his pay rise |
While the increases are clearly good news, it is equally clear that this year's salary reviews have been an exercise in obfuscation. Associates from each of these firms have complained to RollOnFriday that the figures are being carefully massaged to appear in the best possible light. For example, at A&O the increased rates only kick in from May, not on the anniversary of qualification. So September 07 qualifiers at A&O will be 3PQE this autumn, and at first sight would seem to be entitled to £85k. But in fact they will get a "mid rate" of £77k from May 2010 to May 2011, by which time they will be three years and eight months qualified. In effect they are overpaid by £3k for four months and then underpaid by £8k for eight months...
The whole thing is becoming a bit of a game. However it's clear that the Magic Circle is also adopting more flexible packages and slowly moving away from the archaic associate pay lockstep model, following the example set by some of the smaller City firms, Sooner or later law firms may actually start paying lawyers according to what they are worth. Crazy stuff.