US firms

Big US firms match each other again, in the latest pay war


Goodwin Procter has raised its salary for newly qualified lawyers in London to £161,500, as a number of other US firms have joined the pay war and hiked salary in the City. 

The London branches of US firms generally take one of two approaches in paying their London lawyers in line with US colleagues. Some firms peg to the dollar, based on the currency exchange on or around pay day. However, this can result in either incredibly good or under market pay on a month by month basis, if the conversion rate fluctuates wildly. In order to provide a degree of certainty, some US firms that peg to the dollar have introduced a fixed floor and ceiling - so that rates can never go above or below a certain level. 

The other approach taken is to have a set exchange rate, so that London offices fix a conversion figure at the outset in line their US counterparts, which then remains the same each month.

Goodwin uses a set rate, and the firm will now pay its NQs a base salary of £161,500 (up from £148,500), effective retrospectively from 1 January 2022. Other juniors will be rewarded as follows: £169,000 (1 PQE), £188,000 (2 PQE) and £214,000 (3PQE). 

Last week, Milbank was the first out of the blocks to hike associate salary, which prompted Goodwin and other firms to promptly follow suit. Milbank sent a memo to its US, London, Asia and Sao Paulo associates detailing the new pay scale (although it is not clear whether the London office will peg salary to the dollar or use a spot rate):


Milbank


McDermott Will & Emery and Fried Frank have also copied Milbank's pay rises, along with Goodwin. 

A spokeswoman for McDermott Will & Emery confirmed to RollOnFriday that the firm is "matching the Milbank scale" for US and London associates. She said that the firm's "UK pay is not linked to the dollar," (i.e. it will stay at the same level each month), but she declined to provide the converted salary in the UK. 

“We have recently increased our associate salaries in London, taking into account salary inflation and other factors that are happening in the London market right now," said McDermott's London Managing partner Hamid Yunis. "We are of the view that the pay level we have set is very competitive in the context of firms operating at the top end of the London market.”

A Fried, Frank, Harris, Shriver & Jacobson spokeswoman confirmed that the firm has also matched Milbank, and will use a "set exchange rate" in the UK, which is understood to convert to £160k for NQs when converted to sterling.

There are of course a raft of firms with large US components, where the US offices are untethered to the UK offices for pay. For example, Baker McKenzie has matched the Milbank pay scale for associates in the US, which will put their NQs on a salary of $215k - around £160k based on today's conversion rate. But spare a thought for Baker McKenzie's NQs in London who, in comparison, will have to survive on just £105k (following December's pay rise)

Playing pay wars in a different field, Fieldfisher has increased NQ salary from £77k to £85k in London, and from £45k to £50k in Birmingham and Manchester. 

And Clyde & Co has raised NQ salary from £70k to £80k. 

"At Clyde & Co we are focused on investing in our people in all respects so that they can enjoy long, fulfilling and varied careers with us while providing clients with the market leading levels of service and legal advice they expect from a firm of our standing," said Rob Hill, chair of Clyde & Co's UK board. 

If your firm is raising salary, do get in touch with RollOnFriday to provide details

Tip Off ROF

Comments

US Associate 28 January 22 09:58

The elite US firms are ignoring this rise.  I do agree we are paid too much.

Although I would add the firm’s charge-out rates have not changed because of NQ pay.  So the argument “will clients pay for it” just shows a lack of understanding about how law firm finances work.

Partners are actually just sharing more of the money to avoid mass desertion due to increased hours last year.

Baker Junior 28 January 22 10:26

Spare a thought for Baker associates on the continent, who earn half of what they do in London for the same hours (and a quarter of NY, but for their hours...)

Anonymous 28 January 22 10:32

My daughter is an NQ at a US firm and the salary is ridiculously high. Although, my daughter is very bright she is clearly not worth anything like what they are paying her.

The stress levels are through the roof and she is required to respond to messages and work demands, all hours of the day and night, including weekends. I worked out the hourly rate she earned for all the hours she worked last week and it was £12 an hour. Yes you have read that correctly.
 

My daughter will be moving shortly to a firm who won’t try and cause a stress induced heart attack or mental breakdown while she is in her early twenties.

lets_lurk 28 January 22 10:53

The brutal hours are the same whether there is a pay increase or not. It's not like these firms were making their lawyers work 10 hour days and now they're required to work 14 hour days. They always have and always will have to work 14 hour days, 6 days a week. The law firms don't care, in fact they exploit it. The smart ones go in, save for x3 years and then move in-house or to a more humane firm. There are so many bitter, resentful, overworked associates with me that health and alcohol related issues working at these firms who are constantly gas lighted and made to feel inadequate by partners who think if they hand out an extra 20k will make it justified. 

Anonymous 28 January 22 10:54

@10:32

168 hours in a week. Assuming you bill all 168 hours. 12GBP an hour works out to NQ salary of ~105k.

Spam Hamwich 28 January 22 11:20

@10:32, you must be rubbish at maths. Let's assume your daughter does work at a US firm and her hours per week are 84 hours (12 hours a day). £12 times 84 hours times 52 weeks gives £52,416 annual salary. Hmmmm I smell shet burgers.

anon-y-mous 28 January 22 13:07

Anon 28 January 22 10:32

"The stress levels are through the roof and she is required to respond to messages and work demands, all hours of the day and night, including weekends."

She's in for a shock in her new role. Lawyers have to deal with this sort of thing, whether you are in a US firm, and MC or SC firm or even if you are in-house in a lean time (as I am).

Anonymous 28 January 22 16:33

The problem is management culture and allowing clients to rule you.  There is such a fake level of urgency in law it's silly. 

Miss K Alkulashun 28 January 22 20:27

Being generous, he might mean after tax and other deductions - so £140k is probably take home, I don’t know, about £85k, or £1600 a week.

£12 going into £1600 implies 136 hours worked.

And he quite clearly said the hours she worked, not billed. So it’s just about possible that she only slept, say, 20 hours that week (3 a night) and working from home so had very few breaks (12 hours), working every hour available other than that. Seems unlikely, but could just about.

Anon 28 January 22 20:50

Haven’t Clydes just caught up with the inflationary rises they failed to give for the last 5 years?  

Anonymous 29 January 22 13:36

68k senior associate at 10pqe at silver circle firm here. It ain't raining money. 

What are you talking about 29 January 22 17:06

@Anonymous 13:36 You must have a personal idea of what a silver circle firm is; because none of the SC even offer that for NQs. 

BCLP is 95k, Macs 100k, Ashurst 105k, Travers 100k and HSF 105k. So how could you possibly be on 68k as a Senior?

MC NQ 29 January 22 18:23

@ Anon 13.36

 

Regional? All SC firms pay more than that at NQ let alone at senior associate level.

Anon 30 January 22 10:55

Crazy. Senior associates are paid even more… at the top end, US firms like Goodwin, Kirkland etc are paying a set salary of £285k (GBP!) on current spot rates, plus there was a $64k COVID bonus… plus $115k minimum fixed bonus for hitting hour target (rising up to 70-100% for high performers), plus $30k special bonus plus better benefits… so close to half million GBP. Having worked both magic circle, silver circle and US, I can tell you that I worked harder at MC (and not much less at SC)

Anon 01 February 22 14:37

Utterly ridiculous money but you may as well cream it while you can because firms like Dechert who don’t even pay that too rate will kick your ass out the door and pay terrible redundancies the second there is a down turn like they did to the NQs and senior associates last year. The partners certainly won’t take that hit. 

Freelawyer 02 February 22 14:19

I still don't understand why people stay in these places for more than a year. Yes, as an ignorant graduate, this looks appealing; and yes, you may want to qualify at one of these places and start in a department of a reputable firm. But after you see how much unnecessary bullsh*t you have to do and how you have to push yourself for these idiotic partners, why on earth would you bother?

Related News

X

Don’t miss your best career move. Receive approaches from top law firms and in-house employers when they want someone just like you.