Linklaters makes a stand
Linklaters has said in an email to staff that it won't "rush into matching" NQ salaries, in response to the City pay war.
The Magic Circle firm sent an email to its London lawyers stating that whilst it recognises that their "NQ salaries are now below those of some of our competitors", the firm does "not believe that the right course of action is to rush into matching salaries at NQ level without properly considering the impact of any changes and the wider economic context."
"This includes understanding how any changes would be applied across all PQE levels (including counsel and knowledge lawyers)," continued the internal email, "and taking stock of whether the bonus continues to work most effectively.”
The firm added in its email that it would be "exploring these issues with the Partners over the coming weeks." (Translation: if more City firms keep raising salary, Links may have to consider whether to loosen the purse-strings).
Linklaters is not alone in trying to take some heat out of the pay war. Last week Allen & Overy told its lawyers that "after careful consideration of the market and with economic conditions becoming more challenging" it had "decided not to increase associate spot salaries at this time".
Both Allen & Overy and Linklaters pay their NQs a base wage of £107,500, having raised salary twice last year; first over the summer, followed by a second hike in autumn 2021.
However, the two firms now pay less than their Magic Circle rivals. Clifford Chance raised NQ salary in May by 16% to £125,000, matching Freshfields, while Slaughter and May is also currently paying its NQs £115,000.
And Linklaters' financially cautious memo comes just as Herbert Smith Freehills has raised its London NQ base salary by 14% to £120,000 (plus bonus), with the Silver Circle firm leapfrogging over Links and A&O.
"There is intense competition for talent in the international legal sector and, in-line with other leading firms, we have taken steps to ensure remuneration for our associates remains competitive in our markets," a HSF spokeswoman told RollOnFriday.
Herbies said it is also "increasing associate salaries in London and making significant investment throughout the associate salary bands". However, the firm declined to give further detail.
Whilst £107,500 is hardly a paltry sum for NQs at Links and A&O, it's now over £70k shy of the top of the market; Akin Gump (without consideration for others looking to tighten their belts) has just boosted NQ pay to £179k.
Is your firm raising or freezing salary? Let RollOnFriday know.
Linklaters: wake up and smell the inflation!
An exodus is imminent amongst A&O/Links refugees - put forward your CV asap for that higher paid UK/US job!
Linklaters partners already woke up an smelled the inflation, they need higher payouts.
My firm only pays £65k more for a NQ. Cute.
Should say “Linklaters cuts pay by 10% given inflationary environment and static salaries” while utilisation at all time high and partners drawing out to the max.
Rumours of active discussions about redundancies in the autumn in quieter areas at at least one Magic Circle firm unless things pick up fast in September.
US bonds, PE and restructuring are in a perilous state - no meaningful rebounce until Q3/4 2023.
With inflation going through the roof, a pay freeze is a pay cut!!
Could someone kindly share 3PQE-5PQE bands at HSF?