Freshfields has given its associates massive pay rises which put NQs on £85,000.
The Magic Circle firm's trainee salaries are rising by £2,000, with first year trainees to be paid £43,000 and second years £48,000. But the rises really rocket after qualification, where the firm uses a performance-based banding system it calls 'Career Milestones'. The lowest band, 'Career Milestones Foundation', covers NQs and 1PQEs and used to be £67,500 to £77,500.> The new band is £85,000 to £97,500, an increase of around 25%. It means NQs will be paid a minimum of £85k, and while they were previously eligible for a discretionary bonus, the firm has said that their new salary exceeds the previous salary and bonus combined.
2PQEs and 3PQEs fall within "CM1" which used to pay between £87,500 and £100,000. They will now be paid between £105,000 and £115,000, and that's without discretionary bonuses. With bonuses, 2-3PQEs can earn between £126,000 and £136,000. Taking Freshfields' median figures (without bonuses) the Magic Circle salary table now looks like this:
|Allen & Overy||Not yet||78,500||92,000||104,500||115,000|
|Clifford Chance||Not yet||70,000||75,500||88,000||98,500|
|Freshfields (old pay)||Yes||85,000 (70,000)||94,375 (75,000)|| 107,500
|Slaughter and May||Yes||71,500||79,000||90,250||99,750|
*Unlike other firms, Linklaters releases figures which include the bonus along with the salary, so its figures appear higher. The figures used in this table are for a median salary plus a median bonus.
The move will leave Slaughter and May lawyers feeling sore. As reported in last week's news, they expected their firm to match Allen & Overy's bumper salaries. Instead the firm resisted and created a two-tier Magic Circle for pay. The only question was which way Freshfields and Clifford Chance would jump. Now, Freshfields has jumped. In fact it has leapfrogged right over A&O, at most levels. Its NQ pay is higher than A&O's by £6,500 (and £13,500 more than Slaughters'), while it only pays less at 3PQE, assuming the lawyer is not awarded a bonus. Meanwhile, Its straight salaries now dwarf Linklaters' figures, which include bonuses.
Staff were told last Friday and delighted insiders leaked the news to RoF within minutes (leak your stuff to RoF within minutes too, please). Julian Long, London Managing Partner, said "Our ability to attract and retain the most talented individuals is critical to our continued success". He added, "Obviously we should not underestimate the need to be competitive with regards to pay in our market; we believe that making changes across the board for our trainees and associates maintains our strong position as one of the most attractive firms in the market".
Staff at Clifford Chance will be feverish with anticipation. In the meantime, celebrating Freshfields lawyers should probably raise a glass to A&O's management.
And for the second comment, yes, Linklaters have increased salaries and decreased bonuses at the junior end. But it seems that they also now release just a "total cash" remuneration amount which is the amended salaries and bonus lumped together.
In other words, compared to the likes of FF (and presumable A&O/CC to come) they are haven't increased the remuneration pool much overall.
Beyond that its a slightly different story when it comes to milestone progression.