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A Gibson Dunn NQ celebrates by burning off petrol for fun: "£1.65 a litre, that's nothiiiiiiing!"


Gibson Dunn is the latest firm to join the City pay war, hiking the base salary for its London NQs to £161,700 - the highest in the land (unless you know a firm that pays more).

The LA headquartered firm has raised the salary for its newly qualified lawyers in London from £145,000 to £161,700. Here is the new scale for junior lawyers at the firm:

NQ: £161,700
1PQE: £169,200
2PQE: £188,000
3PQE: £221,800

The rises are effective retroactively from 1 January 2022. They're eye-watering sums for young lawyers, although Law Students for Climate Accountability won't be applying.

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. It appears that Gibson Dunn has opted for a set exchange rate. 

Newly qualified lawyers in Gibson Dunn's UK branch join the £160k+ club along with NQs at Fried Frank (£160,000) and Goodwin Proctor (£161,500). Kirkland & Ellis and several more US firms are understood to pay in the same region.

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".

Taking a wider glance at the profession, there's also a huge difference in pay for those practising criminal law. This week the Criminal Bar Association slammed 'insufficient' funding for criminal barristers which is resulting in "the alarming exodus of prosecutors and defenders from criminal work". 

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.

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Comments

Proper Charlie 17 March 22 22:55

Bet that CRS spokesperson regrets that particular soundbite - wheeled out in every US pay article...

WeilyCoyote 17 March 22 22:58

Can confirm that Weil is (for a supposed big hitter) embarrassingly far off these figures 

Genuinely Interested 17 March 22 23:27

What is the point of the Magic Circle now? Similar workloads for literally 50% less money (£161.7k vs £107.5k). Admittedly this is pre-tax but the difference just gets bigger as you move up the PQE bands. Plus your mortgage borrowing is based on your pre-tax salary anyway.

Genuinely Interested 18 March 22 07:25

@Maths, erm it’s both and depends what figure is your base. £107.5k is 34% less than £161.7k. And £161.7k is 50% more than £107.5k. A 34% increase to £107.5k would only take you to £144k.

Stick to Microsoft Word ;)

Anonymous 18 March 22 09:03

@Maths, are you Magic Circle grad rec? Way to derail a conversation about the pros and cons of Magic Circle vs US firms into a maths debate...

Maths 18 March 22 09:14

Nope. In English:

x is n% less than y means n = 1 - (x/y)

x is n% more than y means n = (x/y) - 1

Stick to your LPC.

Anonymous 18 March 22 09:14

Umm...I think you said "literally 50% less money".

However, based on your own maths, it is "literally" 34% less money.

With the greatest respect, I am not sure are really cut out to be a lawyer if you don't know the difference between the two. I certainly wouldn't pay £150k+ for an NQ with a such poor grasp of the English language.

Genuinely Interested 18 March 22 09:38

@Anonymous, @Maths, *What is the point of the Magic Circle now? Similar workloads for literally 50% MORE money (£161.7k vs £107.5k). Admittedly this is pre-tax but the difference just gets bigger as you move up the PQE bands. Plus your mortgage borrowing is based on your pre-tax salary anyway.

Thank you for engaging with my question instead of getting into knots over an exact percentage...

Anonymous 18 March 22 09:49

It is embarrassing for CRS that their quote is used alongside that of DWF.

 

DWF is the worst law firm I have come across.

Anon 18 March 22 09:53

@Genuinely Interested - the problem you have illustrated is that you can either:

1. Get paid 50% more moving to a US firm; or

2. Are being paid 34% less at MC.

The words being paid 50% less mean you are getting half the amount - the perfect illustration of this, is if a GD associate gets a 50% pay cut, i.e. is being paid "50% less", then they'd be earning £80,850 not £107k.

You simply can't equate a percentage of a smaller number as being the same as a percentage of a larger number - that's not how maths works and as a word of advice, don't argue this, its imprecision like this that gives rise to negligence claims so you'd be better off gracefully accepting that you've got it wrong and conflated two different percentages.

Maths 18 March 22 09:54

Failed again. The below implies the Magic Circle firms are the ones paying more.

“What is the point of the Magic Circle now? Similar workloads for literally 50% MORE money (£161.7k vs £107.5k)”

Accuracy matters in the law.

Anon 18 March 22 10:00

What is the point of the Magic Circle now? Similar workloads for literally 50% MORE money (£161.7k vs £107.5k). Admittedly this is pre-tax but the difference just gets bigger as you move up the PQE bands. Plus your mortgage borrowing is based on your pre-tax salary anyway.

But on that formulation the point of the Magic Circle is to do the same amount as a US firm "for literally 50% more money" so that's the opposite of the point you were trying to make.

I think what you really want to say is:

"What's the point of the Magic Circle now?  You can do the same amount of work for 50% more money if you more to a US firm." 

I think the answer to that is probably still prestige.  You can quibble over that but certainly for Slaughters (and I'm not convinced I buy it as work as strongly across the board) it still holds and if you do four or five years and Slaughters you are pretty well placed to walk into a partnership track at any decent firm.

Busty observer 18 March 22 10:03

MC 5PQE is paid £140-150k (+10-15% bonus) while a US elite pays £220-250k (+25-40% bonus including special bonuses). That said, don’t be fooled by statements that the workload is the same because it’s plainly inaccurate. At a US firm you’re subject to heavier workload and pressure, and you get less perks like in-house hot meals unless you work at K&E and Latham.

The Answer 18 March 22 10:10

@Genuinely Interested - you’re definitely wrong on the maths point and pretty sure you were not asking a genuine question, but if you really want an answer:

1. The Magic Circle is good for certain advisory practice areas where K&E etc either don’t practice in the relevant area (employment, pensions etc) or have only a small practice as a support department for their corporate team (competition, IP et al.).

2. In the areas where the best US firms have strong practices, it becomes harder to justify why you would choose Magic Circle. If you’re a corporate / leveraged finance / funds lawyer, you’ll do similar hours at a top US firm for materially more money and often better work (PE clients are more demanding but also more innovative than the big corporate clients / banks a lot of the Magic Circle have built their practices around).

The bigger point about the salary differential is that while the US firms pay an extra third or so at NQ level, their bands also increase much more quickly, so by the time you’re a few years in and include Cravath scale bonuses, US associates are on more like double what their MC counterparts are paid.

DingDong 18 March 22 10:19

@GenuinelyInterested i don't really see what the MC game plan is. A couple of them are seriously trying to break into the US (freshfields and A&O) but how feasible is that, especially when they don't have the financial muscle of US firms? meanwhile in london, the US firms are growing in size and becoming increasingly 'legitimised' by working on more and more deals and recruiting former MC associates and partners.

I'm not sure what the MC can do but it seems like they'll die a slow death in the next decade. relatively speaking - they're still great firms and will be but they just won't rule the roost in london like they did 20 years ago. just my two cents!

Curious 18 March 22 10:26

@WeilyCoyote - how far off? I thought Weil would match instantly as it does in the US! Strange to see as I’m considering US laterals from my current shop…

Anon 18 March 22 10:28

I think the MC might just cut their trainee intake by half and raise salaries to US levels. Seems like the only way they'll still be able to attract the top juniors and have enough left over to still pay their senior lawyers enough to keep them form jumping ship...

Apples with Apples 18 March 22 10:34

Also, Gibson Dunn is not the top at current FX rates.

K&E etc pay Cravath rates ($215k at NQ) converted into sterling at the spot rate month to month (most have a cap and collar, which is helpful for mortgage purposes).

At the time of writing, its $1.3143 to the pound, so a K&E NQ is on just over £163.5k. Obviously that can go up or down, but it's misleading say some firms are unequivocally paying more than others over the long term.

Essentially you're either on the Cravath rate or you're not. If you are on the Cravath rate, there will be some small difference between firms based on whether they pay a fixed sterling equivalent (and, if so, when and for how long they fix the FX rate) or whether they pay monthly at the spot rate.

Simples.

 

Anon 18 March 22 11:50

CRS will “resist” paying an NQ what is pays junior partners?  Now that’s surprising, although it rather suggests the option was ever viable in the first place…..

CRSLifer 18 March 22 12:21

Don't worry my fellow CRS-ites, I'm sure you've already been 'informally' told about the mega dollar rise coming in April (pro tip: have a look at what our competitors are paying before you get excited about it...)

Oh dear 18 March 22 12:24

Quite possibly one of the most pedantic and pathetic discussions has gone on above. No wonder lawyers have a bad social rep

Insider 18 March 22 13:06

The US vs UK debate is doubtless riveting to many private practice lawyers. I’ve been practising for 10 years now (at a SC, MC and now an elite US), and for the benefit of the younger lawyers, I make the following observations:

A. If your interest lies in areas outside of Corporate/M&A, Lev Fin and Restructuring, don’t bother with US firms even if you’re offered a role. Advisory practices such as pension and FS regulatory are akin to “back office” function, and therefore aren’t respected like your peers. You’re also unlikely to be exposed to the same quality work a MC firm may have on offer.

B. I’m involved in recruitment of the firm’s associates and frankly, while we can be desperate for staff at times, we’re careful in our recruitment and focus on attracting best of the best talents. I can’t speak for other US firms but I’d expect each elite US has hordes of associates which are top performers from MC firms - and trust me these people are competent and deserve the big bucks. 

C. Culturally though, MC firms are likely to have a more collegiate culture. You’re also more likely to score the odd secondments to Dubai, Asia and Australia, not something US firms can offer. International experience doesn’t always add value to the practice of law in the UK, but it helps you bolster your network and develop an ability to deal with people with background different to yours. 

D. US firm clients are more demanding and you’re often expected to turn documents faster (and therefore the late nights/weekends). Anyone who has worked at a elite US firm would understand that.

E. If you’re very junior (5PQE or below), go to a SC/MC firm for better training. Mid-level/senior associates at US firms are too busy to teach and this can jeopardise your career development. 
 

Always consider the above points before making a switch. 
 

Ben

Lawya 18 March 22 13:31

Everyone thinks moving to a US firm and earning 250/300k a year is a no brainier but they don't realise they actually have to work 14 hour days, and most weekends on a consistent and unrelenting basis. You are literally eating all of your breakfast, lunch and dinner in the office restaurant and you're lucky to get one social activity in per week. This takes its toll. It's not just simply a case of doing a few more hours for more money. 

Anonanon 18 March 22 14:18

The brutality of the prolonged maths discussion makes me weirdly proud to be part of the legal profession. 

Amused 18 March 22 14:34

To the children arguing about percentages - at least the chap pulling up the OP on 34/50% - please do grow up. One thing you will realise after years of legal practice is - you need to learn to pick your battles. This is most definitely not it, and being a pedant about silly things like this in the real world does not make you a better lawyer.  

Tom 18 March 22 14:54

@Lawya

Are you really complaining about 14 hour days? I work those hours and find it a breeze. I’m surrounded by similarly intelligent, well-rounded, highly motivated individuals. The work I do is truly market-leading. The office is state of the art and I have access to everything I could possibly need. If you are complaining about a situation like this you need some perspective.

US Associate 18 March 22 15:21

When these pay increase make the news there is always lots of discussion about whether it's worth jumping to a US shop for more £ but less life. However, if your ambition is to make partner the bigger concern should be the future of the firm (and more importantly, team) at your current shop. When I moved to a US firm it was because I couldn't see a future for the SC/MC in my area. If a business can't grow then it will be making fewer people up and you will never make it up the greasy pole. Not to say that it's easy to make partner at a US firm but as US firm PEP keeps rising and the SC/MC take more of a hit as they increase associate pay to try to compete it feels like the balance is starting to shift.  

@Ben 13.06 18 March 22 15:24

Spot on analysis. 90% of the MC lawyers don’t actually get to work at an elite US (even if they want to), as these firms have high standards which one can only find out during the interviews. Recruiters like to understate the difficulties in order to receive CVs. On the profitable, transaction-based areas in which US firms operate, the overall quality of senior associates in a US firm is better than MC/SC.

The key problem with US firm is that there is minimal back office support available - no paralegal, no librarian, non-existent secretarial/trainee support, and abysmal precedent management system. This inevitably results in longer hours which many complain about.

Bongo 18 March 22 18:44

@13:31

1. I don't think anyone thinks a move to US firm is "just doing a few more hours". Anyone sensible understands the faustian pact.
 

2. Obvs based on my experience only but I disagree with your characterisation of the hours. I'm former MC now US: I'd say the hours are lumpy. A few weeks of relentless work, a few weeks of basically doing nothing.
 

Overall, I think US firms are perfect for a short term stint (2-4 years). If you're smart, you can leave with a pretty chunky pot of cash and some stellar additions to your CV. 

Aristotle 19 March 22 10:18

To be frank, it would appear that many assume that they would necessarily secure a role at an elite US whenever they wish, without recognising the brutal reality that they may not have what it takes to excel at such firms. 
 

Partners at US firms appreciate that formal training is lacking and therefore intentionally recruit superstars from MC firms or, in the rare occasions, abroad so that these soldiers can stand on their own and manage tasks independently. I’m afraid that many from MC firms don’t realise that the US standard is exceptionally high, and not everyone can succeed in such environment. 
 

Succeeding at a US firm entails far beyond assiduousness and perseverance. Sometimes, I fear that the safe option, being employment at a well supported MC/SC team, is the most desirable and preferable to majority of the lawyers. Curiosity kills a cat, Dunning-Kruger effect can pulverise one’s career and self-esteem. 

LaawwwwwwyA 19 March 22 12:40

If you think working working 14 hour days (09am - 11pm), five days a week is a "breeze" then clearly you don't have much of a life/hobbies/things you do with friends and family outside of your work. Fair enough if your life if your work but most people would rather do some other more interesting things with their life outside of doc blozzing!

Anonymous 21 March 22 08:59

Weil, White & Case, Ropes, Fried Frank and other second rate US firms are now being left far behind on salaries - avoid if you want to be paid market.

Anon 21 March 22 13:28

If you want to (a) earn more cash and (b) still have a semblance of a social life the answer is simple: Move offshore.

MC and Elite US in the UK can't compete with the offshore take home pay / social life ratio. 

Truth teller 22 March 22 07:33

White & Case has slightly lower pay but pays the highest bonuses and offers arguably the most well-established back office support out of all elite US firms, Baker McKenzie and Jones Day included. 

@08:59 23 March 22 20:25

Agree. From what I’ve gathered these firms pay top of the market £200k+ by 3PQE: Kirkland, Goodwin, Simpson Thatcher, Latham, Paul Hastings, Akin Gump, Faegre Drinker, Paul Weiss, Sidley, Skadden, and Davis Polk.

Insider 24 March 22 08:13

It is undeniable that the hours are longer at a US firm, or at least it’s generally harder to get cover due to the lean team (and if you’re a mid level it’s not common that you take no leave for the entire year). For instance, MC firm would easily have 3-4 times more associates than a US firm. What it means is that for every deal US partner would only put in 1-2 associates, in contrast to a MC partner who would staff 4-5 associates. In such situation, you cannot possibly take leave at a US firm because there would be no one to cover in your absence, and your hours will be materially longer than MC firm. This can be very stressful to some, but fine for the ambitious one. 

Unlike MC firms, US firms’ billable target doesn’t get adjusted even if you have taken 4-week leave by virtue of your entitlements. Because of this associates may be less inclined to take leave or have to work really long hours to “catch up” the 1800-2100 billables to qualify for the quarterly/half yearly bonuses.

US firms in London rarely do panel work and thus associates have to do substantially more BD. This is good for career development, but again bad for social/work life balance. 

Overall, US firms have their downsides. But don’t get me wrong, I like the model and can see how someone who is technically strong can success in this environment.

Finally, US firm is much less tolerant of non-performers. You need to be beyond hard working to survive, and I’ve heard too many stories where new recruits (usually from MC firms) get sacked due to their incompetence, or inability to do deals if there isn’t a precedent.
 

Ben
 

Anon 24 March 22 13:01

I work at US firm and take all my 28 days leave a year… this year my firm is paying 10k for a holiday for me on top of usual bonuses , COVID bonuses etc… 

Anon 24 March 22 13:03

@w&c comment - how does W&C pay the highest bonuses?  All US firms for 7+ PQE pay $115k as a starting bonus (last year it was $60k COVID and $15k special bonus on top, plus up to 75% more for top performers). Does W&C really pay more than that? 

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