From hot to cold like that.
Allen & Overy has frozen associate salaries after it raised the pay for newly qualified solicitors twice last year.
The firm usually reviews pay in the summer, but in an email to lawyers today it said 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".
The Magic Circle firm said it would keep the position "under review" (translation: if other City firms raise pay, it will have a rethink).
The move suggests the recruitment battle may be cooling down - or at least, that A&O hopes it is.
In the heat of the pay war last year, several City firms including A&O found themselves hiking NQ pay in June and then again in the autumn. In the second round of raises in November, Allen & Overy matched Linklaters after its Magic Circle competitor increased NQ pay to £107,500.
Associates at A&O are paid a fixed amount at each level, whereas senior associates are paid within a salary band - those bands will also remain unchanged, the firm has told staff.
Still, they can always collect a bonus. They just have to achieve "95% personal busyness", up from the previous threshold of 90%. Woohoo!
A spokesperson told RollOnFriday, "After careful consideration and consultation we have decided not to increase the London NQ salary at this time. It was last increased in November 2021, to £107,500. This is a prudent decision based on a number of factors, including the more challenging business environment. We will keep the situation under review".
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That's A&O relegated. Not a good look. Other firms will eat their lunch.
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For once - nothing to say. Good on Slaughters.
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Ouch
2000 billable hours for 8-10% pay cut in real terms
The recruiters will be circulating.
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Wow! 10% inflation, no pay rise. They are toast!
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Thankfully, my firm raised salaries last week. If not, I wouldn't have put it past them to rely on 'the A&O precedent' to hold them steady.
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Surprised that A&O aren't going to match Freshfields or CC, let alone S&M. Frankly quite comedic that their justification to NOT raise salaries are the current market conditions, when in reality it should have been the reason to RAISE the salaries.
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Private Equity money has run out and we are heading to a recession.
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Associates should move.
After all, they’re being paid less because NQs are being paid more. It’s a form of subsidy.
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Umm, all the other big firms may follow. This could be just the canary in the coalmine.
In other words:
DOOOOOOOOOOOOOM!!!
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Bless them. Doing the right thing for the country.
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Struggling on, the poor souls at A&O may scrape together enough to buy a stale crust
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Of course the poor darlings will still continue to roll through the bands and get significant annual PQE-related rises. It’s just that those bands will stay the same. Tiny violin time.
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@Bingus How are you feeling about your bonus now? Some of us will be lucky to see anything this year I suspect.
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Iggy 30 June 22 18:32
Umm, all the other big firms may follow. This could be just the canary in the coalmine.
In other words:
Not sure about this Iggy…. Partners I know at Knights just received huge pay increases. Although only those Knights invited to sit at the round table may have been in that club! Who you know.goes a long way in Knights culture.
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