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Shearman & Sterling, yesterday


Shearman & Sterling is the latest US firm to announce pandemic-proof pay rises, by upping NQ salary from £120,000 to £135,000.

Shearman will also increase the salary for first year trainees from £45k to £50k, while second year trainees will be paid £55k (up from £50k). The firm is also boosting the salary for its associates, with 1PQE pay rising 18% to £145K; 2PQE salary up 19% to £155K, and 3PQE pay rising 19% to £165K. The US firm confirmed it has increased UK associate salary "across the board for UK junior, mid-level and senior associates".

"The competition for associate talent is fierce and these changes ensure we remain very competitive in the market", said a Shearman spokeswoman.  

Shearman & Sterling held its pay for NQs during the pandemic, during a time when City firms and some of the Magic Circle cut salary. During the halcyon days of summer 2019, City firms were succumbing to the NQ gold rush with the Magic Circle hiking NQ pay to £100k. It was widely seen at the time as a move to turn junior eyes back from US firms, which have sprayed NQs with salaries of over £130,000 (and that's not counting the bonus). But with Shearman & Sterling, White & Case et al. increasing the wedge for NQs and associates, the gulf in pay in the City could widen substantially. 

Outside of the astronomical US salaries, Linklaters has upped its NQ salary to £92,500, plus a discretionary performance bonus, which will be effective from May. Linklaters was one of the City firms to have reduced NQ pay last summer, cutting it to  £90k, having previously offered a minimum salary and bonus of £100k, pre-Covid.

Slaughter and May's staff will also get a rise. A spokesman for the Magic Circle firm confirmed that "eligible associates will move through the PQE salary scales on 1 May 2021", following the firm lifting its pay freeze earlier this year. The firm has also carried out a full salary review for other staff, including Senior Counsel, Business Services employees, PSLs, Executive Assistants and Document Specialists.
 

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Comments

Anonymous 30 April 21 09:06

How will they cope?

It costs £88,000 to decorate a small flat to a decent standard these days, unless you want to live in a John Lewis nightmare or a skip.

malatrou 30 April 21 09:23

Asking clients to pay the fees necessary to cover these salaries is just taking the piss. 

But some clients will seemingly happily have their piss taken.  You can't really blame S&S et al for that.  Hopefully the quality of the work will match the fees.

Anon 30 April 21 09:40

Kirkland is increasing NQ salaries as well... why is this not being reported here??? Still comfortably the market leader....

Anon 30 April 21 09:48

@malatrou 

As you say, it's a vanity thing as well. Some Clients want to be able to say in conversation that they can afford the big dogs, who work in big shiny offices, who pay their NQs £100K+, who use Armand de Brignac for mouthwash. 

The quality of work can easily be done (and possible exceeded) by someone else for far far less but without the glitz. 

Lionel Hutz 30 April 21 09:58

@ malatrou 30 April 21 09:23

 

Do the clients pay proportionately more or is this fewer well paid people doing more work?

 

Slaughtered at SandM 30 April 21 10:14

The SandM announcement is hiding the fact that they have moved associates through the payscale bands but these are at the 2019 levels.

So in other words, when people were supposed to move through the bands in May 2020, they should have (1) moved through the bands, and (2) received an inflation uplift. Neither of these happened, and people stayed on their current pay (with some downgrades for qualifiers).

Then, when they unfroze salaries earlier this year, they essentially created new pay bands at a lower level than the previous bands, so no normal move and no inflation uplift. This May 2021 moving through the band is now moving associates back to what the bands were in 2019 and again with no inflation uplift.

Gotta recognise that Paul Stacey and the remuneration committee are shrewd businessfolk. They've managed to reduce workforce pay in what has been the best year for the firm ever, when you would normally expect to see an uplift in remuneration based on the booming business. So far a few people leaving but not an exodus, so it's paying off.

I'm not sure how long this will continue to work though. A 5PQE at Slaughters is paid less than an NQ at most US outfits, which is bound to make some reconsider their life choices.

malatrou 30 April 21 10:23

@Lionel Hutz 30 April 21 09:58

Assuming the work would take a similar amount of time at different firms, a lower hourly rate - which which you expect to go along with a lower salary - should be cheaper for a client overall.  

@Anon 30 April 21 09:48

The old 'no-one ever got fired for using XXX law firm' argument probably applies too

Slaughters till I die ... 30 April 21 10:27

@Slaughtered - 

The pattern you describe has been true for most of the past 15-20 years, although it does seem to be at a particularly stark ebb at the moment.  

Few people at Slaughters really moan about the money because - for all its flaws - it stands apart from its competitors, especially in Corporate.  

If someone leaves at 5PQE the money may provide a convenient justification for the decision but the reality, from what I can see, is that people mainly leave because of poor prospects or a desire to do something different. 

Brian Scalabrine 30 April 21 10:29

These salaries are funded by clients who are very happy to pay for the best legal talent, no matter what it cost.  Funds and private equity firms and the big banks have deep pockets and can pay for this.  The driver for this isn't the typical PLC or local authority, so there is no issue of piss taking.  Having worked for a PLC, panel firms are Clyde and Co, Pinsent Masons and Addleshaw level.  The Kirklands and Lathams and Shearmans are out of reach, and tbh don't provide the full service that we may need. People should be less concerned about how much a billion dollar fund pays its external lawyers.  

Anon 30 April 21 10:31

Just do what most sensible people do.  Get a few years under your belt at slaughters then move on to earn more money and progress your career on the back of it.  

Anonymous 30 April 21 10:45

People here are missing the point. The US business model is completely different to the UK one, which is why they can afford to pay the mega bucks. 
 

Whilst hourly rates are higher, they also operate in much smaller teams. The hourly rates are also justified by guarantees of quality + speed. Documents come in at 6pm on Saturday and US PE fund client wants the full suite marked up by 8am Monday? No problem. One of the associates in the team will sacrifice his weekend and cancel plans to do it.

Compare this with UK firm which have armies of associates and would usually deal with a request like the above on Monday.

Yes, it’s a lot of money, but clients who can afford it pay top rates for the US service (which not really the same at any other UK firm).  This, combined with the lower headcount, means that these firms can afford to pay their juniors double what they would earn at a MC outfit.

It’s somewhat embarrassing to see the UK associates whinge and moan about ‘unsustainable salary hikes by US firms on London’.  If you don’t like it, change your business model, or accept the fact that a lot of your best and brightest are going to follow the money. 

Anonymous 30 April 21 10:50

and dont complain when you are fired for not completing 2500 billable hours recovered at 100%.

Anonymous 30 April 21 11:25

Anyone want to post their salary honestly and anonymously? Fair play to the one person that did above. 

Maybe anonymously people could state their PQE, practice area and salary to get a feel for what the market rate is.

Anon 30 April 21 11:37

Moved from MC to US. 5PQE in Corporate, 290k base. Annoyed I didn’t leave earlier TBH (but screw training there). 

malatrou 30 April 21 12:00

Hmm... I've worked at the London offices of two US-headquartered firms (albeit both would describe themselves as 'international' rather than 'US').  We offered the same level of service as that described above for substantially lower fees along with much smaller teams than I've seen at other firms. 

The idea that it's only the S&Ss of the world that offer that level of service is ridiculous.

Anon 30 April 21 14:17

Moved from MC to small US (non-sweatshop), 6PQE, Corporate, 155k. Smaller team, fewer hours, more money.

Sceptical 30 April 21 14:31

Having dealt with a US law firm on a major project I don't really buy the quality argument. for example: we had a call on several documents and said US firm's comments on same for circa 2 hours.

Our team: me and supervising partner, who had been closely involved in drafting all the docs and knew them inside out.

Their team: 5 people, 3 of whom weren't involved in that work at all, or peripherally at best (the partner on their side asked a couple of times what the subject of the call was). No doubt they were all charging all time at headline rates.

also not sure how quality can be sustained if their lawyers are constantly overworked / tired.

maybe the joke is on us non-US firm lawyers for not being paid so handsomely, but I quite like being able to have some control over my free time. (cue another example, I have a friend who is now a partner at a major US firm - having dinner as a group on a saturday evening, he was 4 PQE at the time. His phone rings at circa 10.30 pm. quick as a flash he picks up and goes outside to take the call for 30 mins. I'd probably just have left it till the next morning or the monday to drop the caller a quick note asking what they wanted.)

anon 30 April 21 14:33

Anon 30 April 21 11:37

Moved from MC to US. 5PQE in Corporate, 290k base. Annoyed I didn’t leave earlier TBH (but screw training there). 

 

how many hours a year do you need to do to achieve 4x your salary then. Assume you work for a top US firm that charges megabucks headline rates?

Associate.com 30 April 21 14:37

My firm just gave us a pisstake pay rise after a freeze in October and bonus delay. The exodus has already begun and I expect it to continue. Horrifically shortsighted.  

US Associate 30 April 21 16:08

@11:37 how is £290k base for 5 PQE possible without a COLA (which only typically applies to US qualifieds if I understand it correctly). Assuming you’re a sixth year by US standards, at full market rate that’s c. USD $305k. Not saying you’re lying, just genuinely curious.
 

NQ: £145k base.

Anon 30 April 21 16:24

7 PQE, US firm, 2020 totals, for what it's worth:

c. £230k salary

c. £75,000 bonus for hitting 1,950 creditable hours (min. 1875 client billable). I ended up just over 2,000 billable as did most of my firm. A few were in the 1,800s but the rules were relaxed last year.

c. £30,000 COVID bonus (no hours requirement).

I have friends at other firms who are on marginally higher amounts because of the exchange rate used when converting from dollars.

In my experience from working at different US firms, it doesn't really matter what team you're in, your hours will be broadly the same. Because, with a few exceptions, you will be either a corporate, litigation, restructuring, finance, tax, funds or regulatory lawyer, with roughly the same expectations.

 

US lawyer 30 April 21 16:52

@11.37

No 5PQE London Associate of a US firm is on £290k "base". You're either quoting the dollar figure for salary or, more likely, conflating the salary with your year-end and/or COVID bonus.

Still astronomical for a 5PQE, but you're not on £290,000 PLUS £70-100k in bonuses.

anon 30 April 21 18:05

Still not enough money for what you give up - relationships, health, family, outside interests, reading, seeing friends, having friends,  being human.   Your life becomes a balance sheet of “I’m not very happy but I need to keep going because my ego only knows value through salary”.   
 

Money only buys you things and actually that amount  doesn’t get you much in London anyway.  

anon 30 April 21 18:38

2PQE US Firm (not K&E)

Base - c.£160,000

Year end bonus - c. $50,000

Covid/Summer bonus - c. $32,000

 

Anonymous 30 April 21 20:07

And then there's me. 4PQE, in-house, £80k base plus £15k bonus. Worked majority of the week from home even before covid. I clock off at 7pm the latest. Haven't worked during weekends in ages. Actually have time to spend with my husband and our dogs. 

I left one of the top paying US firms at 2PQE and while it did come with a pay cut - the quality of life has improved so much that I wouldn't go back.

 

Big shaq 30 April 21 20:32

How cringey all these dreamers putting what they earn on here, nobody cares. Only person happy will be the guy who gets 60k at 10 years pqe.

All these so called big dogs in London will turn 40 with a few grand in their bank account but they will still be living in a 1 bed flat with their cat doing 15 hour days 6 days a week.

Grow up and get a life.  

Anon 30 April 21 22:42

Boutique firm, 6pqe, £100k in corporate. No bonus. I work a 40-45 hour week and spend time with my kids, wife and friends. 

Anon 01 May 21 02:15

Further to my comment at 11:37: Base salary - £290k + bonus of 15% last year + COVID bonus: 25k this year. Not at KE but similar. Average hours are about 2,000. Being completely honest, hasn’t really cut into my personal life that much - there’s plenty of work, easy to bill etc etc. Apologies for the inevitable triggering….

MC banking NQ 01 May 21 03:47

Base - c 90+k (not the 100k reported by LC)

One time ‘Sign on bonus’ - 10k

Billing close to 500 hours in Q1 like an idiot while getting paid ~50% less than my US counterparts - priceless

Anonymous 01 May 21 07:22

At S&M you take the hit for the first decade of work with the hope you’ll at least make partner quickly.

Anon 01 May 21 07:36

Maybe in your 20s when you don’t know anything about life and have no commitments the money is attractive.  Once you have grown up and have a family and realise that life is short and spending it hunched over takeaways and a laptop or screen, losing relationships and not knowing your children as they grow up, all so you still can’t afford to buy a decent house anywhere in London but can’t move out because you need to be near the office - you realise it’s not worth it.  Then in your late 30s you are overweight, balding and have aged dreadfully.  All for what?

 

I trained in MC then a US firm; and now do an internal risk role in a large international  firm, earning £130k plus bonus of around £15k a year.  Work is interesting and varied, I get to see how firm is managed centrally and work with management team.  I also get out most days at 6-6.30pm.  Partnership chances are nil, but then they pretty much were before.  
 

 

anon 01 May 21 08:15

Private client - 18 years pqe. Just north of £60K. It does me.9-5 job

 

There are some silly sums being put about on here

Anonymous 01 May 21 10:23

A 5 PQE does not get £290k base.  Dollar figure that’s probably right though. 
 

Big Shaq is one salty MF.  People can do want they want - it’s a life choice and there’s no need to blast them just because they are able to earn the big bucks. 

Anon 01 May 21 12:44

Really dislike this narrative that those who are earning a lot at US firms/similar must be soulless, overweight, ugly, balding and boring. I have friends who are senior associates at these firms and, well, they’re absolutely fine. Yes, they have periods of hard work and often sacrifice their evenings. So do lawyers at U.K. firms. I know a guy who just got made partner at a US firm being mentioned and he looks about 25, into yoga, plays football at weekend, has a wife and family etc.
 

Some of you reek of jealousy and it’s not a good look. 

Big Ploppa 01 May 21 13:48

I think we can all agree these young meteors deserve every penny they are paid. 
 

London to 150!

Curse you god! 01 May 21 15:33

The young slaughters partner I know is in great shape, happy and healthy. Incredibly unfair as he’s also taking home £50k a week net I think. Disorienting that he earns more in 6 days than I earn in a year. And I’ve got poor eyesight and a weird itchy back. 

Anon 01 May 21 18:25

@12.44

 

Maybe. Not on my part though. They are free to choose that culture. I wouldn't want it (never have). They wouldn't want to take the path I did. I do think many, further down the line (maybe not today maybe not tomorrow etc etc) will regret that it does not bring lasting rewards and will look back with regret and that is a shame in life. 

Anon 01 May 21 19:16

The exceptions prove the rule.  For every example of a few partners or SAs who are OK, there are many more who are unhappy and trapped and burned out.  I know several junior partners at large firms (one at a MC firm) and the demands are immense and private life comes second.   That said, he has made partner at least and is well paid for the sacrifice.  It’s the SAs who are slammed week in week out for a lot less money that I think this article is really focussed on. 

Anonymous 02 May 21 16:50

I'm a salarg partner at Berrymans Lace Mawer. This post has made me question some of my life decisions. 

buzzkill 04 May 21 11:25

The argument that clients are paying "for the best and brightest" is total hogwash.

You do not get top quality legal advice out of a junior associate who has been up working until 4am.

The business model of relying on inexperienced junior lawyers, overworking people to the bone and sacrificing proper support functions (e.g. PSLs) isn't conducive to good legal advice either. 

Idea 05 May 21 22:23

@buzzkill: obviously junior lawyers at these types of firms (or any firm) are grunts to an extent. But, not all juniors are the same. The best ones go to the best firms. Accept it. 

Nearly Q’d 06 May 21 07:36

Just what does a Shearman NQ do that is different to NQs at other top tier firms? Are people really getting paid that to write board minutes and run completions? Just trying to understand what a typical day looks like for them. 

It’s JackieWeaverBitch 06 May 21 13:12

“Moved from MC to US. 5PQE in Corporate, 290k base”

yeah but I have a garden AND an allotment and the broccoli is looking really fvcking prize this year! 
 

I think we both know who the real winner is here. 

anon 06 May 21 18:31

For broccoli and garden read “wife, seeing my young children, having friends and a life as well as being perfectly comfortable financially” then you’d be correctly summarising the comparison and anyone with judgment would know who the real winner is there. 

Anon 06 May 21 19:00

“The best ones go to the best firms. Accept it.”

You don’t define “best” in either case - if best at working long hours under pressure, maybe.  But that’s not about legal ability or intelligence.  

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