"Pah, petrol prices, that's not a rise. THIS is a rise."
Lawyers at Simpson Thacher & Bartlett and Covington & Burling in London have been given raises across the board in line with their American colleagues, according to screenshots leaked to RollOnFriday.
It would mean newly qualified lawyers in Simpson Thacher's UK branch are being paid £158,000, making them among the best-paid in the country along with NQs at Akin Gump (£158k), Fried Frank (£160k) and Goodwin Proctor (£161k). Kirkland & Ellis and several more US firms are understood to pay in the same region.
A source provided RollOnFriday with a breakdown of the firm's complete new salary scale, which provides an envy-inducing insight into the giant sums Simpson Thacher & Bartlett is bestowing on its junior lawyers.
The salary increases are retroactive to 1 January 2022, said the leaked memo, allegedly signed off by Jason Glover, the firm's London Managing Partner (who certain recruiters want to namedrop as their best bud).
The leaked Simpson Thacher scale reveals that 5PQEs are now being paid a cool £264k:
The biggest salary hikes across the City in recent months have been prompted by US firms seeking to match or outdo each other across the pond. In January, Milbank was the first major US firm this year to kick off the pay race with a new scale, which was swiftly matched by its competitors. In February, Davis Polk leapfrogged everyone with the highest pay scale, and BigLaw scrambled to realign again. Although, within a few days, Cravath then surpassed that proposal, resulting in firms such as Simpson Thacher & Bartlett unlocking their coffers once more to match Cravath's scale.
The London branches of US firms generally take one of two approaches in paying their London lawyers in line with US colleagues, either pegging to the dollar (which means salary can fluctuate depending on the exchange rate each month), or opting for a set exchange rate at the outset, to ensure salary remains fixed each month. From the above memo, it appears that Simpson Thacher has gone for a set exchange rate.
Meanwhile, at Covington & Burling, NQs salaries in London are being raised from £129,000 to £151,000 retroactively from 1 January 2022, according to this leaked memo. It also reveals that Covington offers a range of salary at each band from 3PQE onwards, presumably based on performance and/or billing targets:
The sums paid by US firms, which are pulling up those offered by top City firms, has prompted public expressions of concern from law firm leaders.
DWF's CEO, Sir Nigel Knowles, warned that "offering more and more money to young people is only a sticking plaster", and that massive hikes are "not a sincere, sustainable or healthy solution for anyone".
Charles Russell Speechlys, which pays NQs a salary of £68k, said it would resist, telling RollOnFriday 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".
Neither Covington & Burling or Simpson Thacher & Bartlett responded to requests for comment.
RollOnFriday's keen to pull together pay scales across the US firms, and the rest for that matter - so feel free to send them in.