"Oh, honey look, a Brit's here. I needed some ice."
US firms Gibson Dunn and Goodwin Procter have both increased their NQ salaries to over £140,000, while Clyde & Co and Irwin Mitchell have decided it's more prudent to pay around half as much.
Gibson Dunn has raised NQ pay from £125,00 to £145,000, RollOnFriday understands, although the firm did not respond to requests to confirm the rise. Meanwhile, Goodwin Procter has increased NQ pay to £147k, less than six months after raising it to £137,500.
Since the Spring, US firms in London have gone cash crazy (even more than usual) as demand for lawyers in the City has powered spiralling salaries and sign-on bonuses.
The £140k+ club is a US-only affair, whose members include 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.
Several top UK firms have also hiked NQ pay, all of which is unlikely to improve the mood of lawyers at firms where pay freezes remain in place.
At Irwin Mitchell there are "mass walk outs of junior staff on the horizon" due to the "embarrassing" pay review this year, predicted an insider. Juniors at the firm have found out there will be no increase to the NQ rate, "even after the firm has been boasting of performing incredibly well over the last financial year".
"The people at the top are greedy and keep all of the profits for themselves", said the fuming lawyer.
An Irwin Mitchell spokesperson responded that "ensuring our colleagues are rewarded fairly and receive a competitive salary for the work they do is something we take extremely seriously".
"Investing in our talent is vital as we look to significantly grow our business and we remain focussed on ensuring all colleagues including our NQs have the opportunity to build their careers here", he said.
In addition to regularly benchmarking salaries, the firm provided a a 3% 'thank you' bonus and "a substantially increased annual bonus pot", he said, while IM's "new Flexible by Choice hybrid working framework" had "proved very popular with our colleagues including NQs and demonstrates our trust and willingness to support their work life balance".
There was a similar outbreak of envy among some lawyers at Clyde & Co, where NQs have been told their pay will remain at £70,000 (after it was lowered briefly to £68k during the height of the pandemic). The firm's financials for 2020/21 showed that revenue increased 2% to £639.6 million, but sources cited a 7.6% rise in profit which translated into 7.5% increase in profit per equity partner, resulting in PEP of £715,000.
"WFW PEP is lower than Clydes, yet their NQ salary has increased to £88k", grumbled one junior lawyer to RollOnFriday.
Although associates at Clyde & Co above NQ level have received pay rises which in some cases have exceeded 8%, a source claimed most of their peers were receiving 5%, which they wrote off as "pathetic" given it "came on the heels of a two year pay freeze" and "essentially accounts for inflation only".
"I am now only paid slightly more than NQs at another silver circle firm that I turned down", said the new solicitor, glaring at Macfarlanes, Hogan Lovells, Travers Smith and Ashurst, and unable to enjoy their £20k+ leap from a trainee salary.
If you've been left bereft, or delighted, by a pay freeze/rise, let ROF know.
Interesting that 2 firms with their head offices in Yorkshire feature on RoF today. One is accused of racism and the other of greed.
What might this tell us about the place?
The NQ salary at RPC has increased by only 3% in London to £70k despite a gargantuan 50% increase in profits. Salaries at all levels are now way below market.
Oh come on. You can hardly shame firms for not paying the same as the highest payers especially when 70k for an NQ is hardly peanuts (it's probably closer to 30k for a high street firm so these figures are just so distorted to begin with). The idea of balance also gets lost as firms like GD are not gifting the salary away they want something in return and the more they give the more they will want. Surely NQs look at the salary range/expectation between firms (they can get into) weigh up what it will be like to work there and take a rounded view. Only naive first year law students think it's all about the short term salary.
The firms not raising junior salaries tend to be the ones with a few very old partners hoping to boost the PEP for their final one or two years.
Staff in those businesses should vote with their feet.
Not sure why the base expectation is that pay rises will exceed inflation at some of these firms.
The US firms have raised salaries in London to reflect the increase in the Cravath / DPW / Milbank scale in June. That is irrelevant to Clydes and Irwin Mitchell since they operate in totally different markets.
The economics of those firms have not meaningfully changed (other than recovering to a largely pre-pandemic position) so unclear why people would expect material changes to salary bands (other than inflation adjustments).
Claims of an impending “mass exodus” over the failure to raise NQ salaries by a couple of grand are laughable.
Come and work for us - we won’t pay you as much as anyone else…
This is the same story over at Squire Patton Boggs. The shop had a record breaking year – “25% year on year increase in revenue” – as proudly announced by the beady-eyed UK managing partner in his recent email, yet they’ve completely stiffed the fee earners on any salary raises, not just in London but across the UK. “Raises will affect only select few associates in select teams” he declared.
Everything this firm does is budget, the purse strings are tighter than a nun’s butthole, pay is stagnant despite the assets being sweated like never before, and the myopic leadership somehow still wonders why is it that associates keep jumping ship in droves for US-level pay packets. The corporate team has turned into revolving door chamber with associates jumping way faster than being replaced.
Shockingly run firm, totally clueless and tight-fisted at the same time.
I'm 7 years PQE in Edinburgh and earn a lot less than £70,000. My salary isn't even that bad in the market. As an NQ in Glasgow I earned just £28,000. I know London is more expensive to live in, but not by that much. And I still have a lovely life. Not sure what everyone is complaining about. If firms want to pay anyone more, they could do worse than looking at the disparity between their Scottish offices and everywhere else before raising pay in London yet again.
What wonderfully distorted reporting.
Have NRF and Baker McKenzie raised this year?
Unless and until Clydes can focus on banking, corporate, PE, and the other powerhouse departments that bring in significant sums and generate internal instructions, and move away from its high quality but modest to low rate insurance work in many places, the pressure on PEP (which PEP is modest by any standards for an international firm albeit not a top tier one) is going to continue to drive down pressure on NQ salaries. £70k is poor for an international firm like this one. But if you think that’s bad the regions are offering around £40-45k and that hasn’t moved in years and years.
Bakers pay around 100k to NQ and more with a discretionary bonus which is pretty good
GC won't be happy
"If firms want to pay anyone more, they could do worse than looking at the disparity between their Scottish offices and everywhere else before raising pay in London yet again."
Presumably you're talking about the disparity between their respective revenues?
Senior associate at one of those firms in Scotland has a £60k baseline for guidance.
I always do love Clydes’ pay review time of year. Usual template is a letter on your desk:
“the firm has had a good year and has solid foundations for growth and we are pleased to have opened up yet more offices around the world but at the same time we must be mindful of the challenges and continuing uncertainty in the UK around Brexit, the counter reformation, rumours of Napoleon’s escape from Elba, Dylan going electric and the rising cost of paper clips, so ….”
Clydes has aspirations to be magic circle but will never achieve that by paying half the market rate.
To Not Sure What All the Fuss is About - the market in Scotland pays significantly less than London and less than Bristol, Manchester, etc. It won't change because although people moan, not enough people are leaving to change that. People will put up with the lower salary even though living costs in Edinburgh are high.
I'm relocating to Bristol at NQ because at the same calibre of firm I'm getting £10k more as an NQ, and will be on more money than most mid level associates whilst still enjoying the 'work life balance' of the regions. If I don't get the work life balance, I'll shift to London. I couldn't stay in Scotland knowing that as a senior associate I'd be earning less than an NQ at a mediocre London firm.
Salaries in Scotland are shocking for law compared to elsewhere in the UK, at my training firm we have lost a lot of junior and senior staff as they realised they were working stupid hours for Scottish pay when they could shift to anywhere in England and earn more, especially in London.
Clydes benchmarks their pay against other similar silver circle insurance firms that have some add-on departments. Hardly groundbreaking as you'll find the DWFs and other similar to Clydes firms will be paying around the same - similar work, similar clients, similar locations. Hardly news.
Actually, at my last (very similar) firm, Scotland generated more revenue per head than anywhere else, including London, but still paid its Scottish lawyers much less. It wouldn't surprise me to find a similar state of affairs at Clydes.
And try a £50k baseline for a Senior Associate in Scotland. Which, of course, is far too low. I suppose my point is that everyone up here, right across the whole sector, is paid quite a lot less than they really ought to be.
Yeah, I think that's a pretty accurate take. Good for you for taking the initiative to seek out a better deal elsewhere. Good luck!
"another Silver Circle firm". Is Clyde's a silver circle firm now? Fvk me sideways
S&G now talk to trainees at that dump! Hardly any training and v low pay…
Clydes isn’t silver circle let alone magic circle by any objective measure such as PEP and salaries and reputation.
"Scotland generated more revenue per head than anywhere else, including London"
Nicola, is that you?
Maybe I am too long in the tooth, but 70k for an NQ still doesn't sound too bad to me given they still don't really know diddly squat. 140k is clearly just nuts.
Is an NQ truly capable of billing £210k of quality work? It seems likely they're still performing tasks on files and adding document review time to hit such stats.
Salary isn't everything if you genuinely enjoy and have a passion for your work- that will take you further in the longer term than a short term salary consideration
Surely it also depends on what type of work you are doing as an NQ and how / how much clients are paying you?
Clydes, DWF, BLM, DACB etc.-many NQs will be doing bog standard injury work either on low hourly rates (c. £110 ph or low FF). They will be bring in annual fees of between £100-140K?
I doubt very much these NQs are getting paid £70k
Yes the £70k is for corporate and other NQs. Not that Clydes does much if any casualty work in London anymore but those NQs will be getting a lot less than £70K.
Just out of interest, how many magic or silver circle firms pay 70k to NQs, have PEP well south of £1m, and do low grade commoditised insurance work in their many regional offices?
'Anon 06 August 21 10:35' tickled me
These firms need to wake up. They’re not getting any London associates in specialist areas for these prices. I just left a firm that charged me out at US rates but paid me less than a 100k. Looking at the number of associate jobs going in my area they are going to struggle to replace me.