"Supposedly it's cold out there." NQs celebrate by setting the thermostat to 30 degrees.
Weil, Gotshal & Manges is upping NQ salaries in London to £165,000.
The US firm had already hiked NQ pay in the spring from £145,000 to £150,000, and then bumped it again to £160,000 over the summer. The firm's latest rise to £165,000 will be effective from 1 January 2023.
The eye-watering raises may, in part, be due to the firm feeling some pressure to compete with the top-paying US firms. One Weil lawyer commenting in the Best Law Firms to Work at 2023 survey, said that their salary was "too generous for what I do," but another believed that their pay is "the lowest level of any comparable firm". Although the latest rise may change that.
RollOnFriday understands that a number of US firms, such as Weil, pay their UK associates a set salary in GBP, without linking to the dollar / salaries in the US. Other US firms to take a similar approach include Gibson Dunn (which pays its NQs £161,700) and McDermott Will & Emery.
The tanking of the pound against the dollar this year, which nose-dived further following Kwasi's fiscal event, had a knock-on effect of boosting the salary of London lawyers at US firms that pay by linking to the dollar. As a result, other firms have also bumped up junior salaries, as they compete in the City pay war.
Firms such as Akin Gump and Kirkland & Ellis pay their London associates in line with the Cravath scale in the US, which determines that NQs are paid a salary of $215,000. Those firms use a collar and cap on FX rates when converting dollar salary into sterling. Akin Gump introduced a collar (1.2) and cap (1.5) for the last quarter of this year, resulting in its NQs and 1PQE lawyers being paid a salary of just over £179k (based on the 1.2 rate collar).
RollOnFriday understands that Kirkland uses a collar rate of 1.25 with a cap of 1.63, adjusted on a monthly basis - with the collar rate putting Kirkland's NQs on a base salary of £172,000.
Other US firms take a different approach. Vinson & Elkins (which also adopts the Cravath scale) uses an exchange rate which is set in January of each year for the full 12 months of that calendar year. The firm typically calculates the rate using the average of the fourth quarter of the previous year, and does not currently have a cap or collar in place.
Goodwin Procter is another firm which uses an annual exchange rate which is set at the beginning of the calendar year. It currently pays its UK NQs a base salary of £161,500.
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