"You mean to say that a Macfarlanes NQ will be paid the same as me?" A Slaughter and May NQ shudders at the news.
Macfarlanes has announced that it will increase its pay for newly qualified solicitors from £107,500 to £115,000.
“We have increased our salaries for newly qualified associates as part of our ongoing commitment to investing in our people and ensuring we continue to recruit talented trainees who will be the future of our firm," Sebastian Prichard Jones, Macfarlanes Senior Partner, told RollOnFriday.
The 7% rise will apply to NQs from September 2023, putting their salary on a par with Slaughter and May, and just below Herbert Smith (£120k).
This month Linklaters and Allen & Overy both raised NQ pay to £125,000, in line with salaries at Freshfields and Clifford Chance, leaving Slaughter and May as the only Magic Circle firm to pay its NQs £115k.
A Slaughter and May insider told RollOnFriday that the firm last raised NQ salary in May 2022. The source confirmed that it did not raise NQ pay, or at other bands, in the latest review - which took place this month. The firm conducts bi-annual pay reviews, and (unlike some firms) there is pay progression for associates to move up the lockstep scale each 6 months, rather than annually, said the source.
Slaughters, which does not have billable hours targets for its associates, will review salary again in November this year, added the source.
In the past when NQ salary was getting bumped up at Slaughters, there was bunching between salary bands. The Magic Circle firm said in a statement last year that it was addressing compression "within PQE levels by creating a wider spread between the top and bottom PQE ranges." So that may be a reason for Slaughters not to up NQ salary at this stage, if it doesn't intend to also raise it at higher bands at the same time.
The industry practice of publicising trainee and NQ salaries invites a pay battle at those levels. That's not the case for higher PQEs, where salaries fluctuate within pay bands which are rarely disclosed, removing much of the impetus for firms to rapidly out-pay their competitors by headline-grabbing amounts.
In RollOnFriday's in-house survey, according to responses so far, clients want City firms to lower the salaries of their junior lawyers, as a balance to not working them to the point of exhaustion.
However, the lure of 'BigLaw' US firms with offices in London, dangling the biggest carrot to their junior lawyers, has had a knock on effect to determine salary across the City.
The elite US firms have adopted the Cravath salary scale over the pond, which is converted to sterling salaries when paid to lawyers in London. This has led to eye-watering sums, particularly due to favourable FX rates in recent times (some NQs may still offer thanks to Kwasi Kwarteng and Liz Truss on pay day).
Members of the £170k+ club for NQ salary include the likes of Akin Gump, Kirkland & Ellis and Vinson & Elkins.
Has your firm raised salary? Let RollOnFriday know.