Bakers joins in the fun
Baker McKenzie has increased its NQ salary to £110,000, leapfrogging over Linklaters and Allen & Overy.
The firm had raised its NQ salary from £90k to £105k in March 2022. And the boost of another £5k to £110k (effective from this month) means that Bakers will now pay its NQs a higher base salary than Magic Circle firms Linklaters and A&O.
A Baker McKenzie spokesman told RollOnFriday that there would be rises "across the board" as "the increase to the NQ salary has been reflected throughout the fee earner levels".
Baker McKenzie's London Managing Partner, Ed Poulton, said that firm believed "in rewarding in a fair, consistent and competitive manner," and that "the attraction, retention and development of our people is key to the success of our firm and is at the heart of our strategy."
CMS is also raising its NQ salary by £5k, from £95,000 to £100,000, effective from this month. Other firms that pay their NQs the same wedge include Travers Smith, Macfarlanes and Simmons & Simmons.
Against the background of the war for junior talent, Allen & Overy recently told its lawyers that the firm was freezing associate salaries. And Linklaters also sent an internal email to say that it wouldn't "rush into matching salaries at NQ level."
A&O and Links' NQ salary of £107,500 is hardly a paltry sum, but it is less than their Magic Circle competitors pay at that level. Slaughter and May recently raised its NQs base salary to £115k, while Clifford Chance and Freshfields hiked to £125k. And Silver Circle firm Herbert Smith Freehills announced last week that it is raising NQ pay to £120k, leapfrogging A&O, Links and Slaughters, in the process.
Playing chicken in a different field, Akin Gump's NQs in London are now paid a whopping £179k*, thanks to the FX rate moving in their favour, as the pound has weakened against the dollar. Sir Nigel Knowles of DWF should be dusting off his "sticking plaster" speech in response.
The biggest salary hikes across the City this year have been prompted by US firms seeking to match or outdo each other across the pond, with the so-called Cravath salary scale adopted by some BigLaw firms, then being converted to sterling salaries in London.
There are of course a raft of US / UK firms where the UK office pay is disconnected from US salaries. For example, Baker McKenzie has matched the Cravath scale for associates in the US, putting their US NQs on a salary of $215k; but it doesn't pay its London associates using the same scale. So, based on the current FX rate, Bakers NQs in the US are paid around £70k more than their UK peers.
But when comparing salary across the legal profession, spare a thought for the poorest end, where "undervalued" Criminal barristers have felt compelled to strike over pay.
*Don't be shy, tell RoF if your firm pays its NQs as much as Akin Gump.
Comments
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Really regret letting go on a FF offer for LL training contract. I don’t understand how, within a year, they’ve come to represent different tiers of law firms…what LL (and AO) management have said about junior lawyer pay also reflects their disdain for us. Would not have made the same decision if I had known this before hand.
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Thanks for pointing out the £70k difference between the US and UK NQs at Bakers. What’s the justification for that, other than management thinks they can get away with being cheap in the UK?
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LL's position is not sustainable.
A small gap with FF pay is probably not that bad (FF is not a terribly nice place to work) but the gap is too big. And getting paid less than HSF and BM is not going to cut it.
So unless there is a massive economic crash relatively soon, they will have to up their rates.
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@Anon 15 July 22 08:26
Probably because Bakers has so many international offices it can't afford to pay thousands of associates that scale.
Also, controversial opinion, but the reason US firms pay so much is because US law grads have hundreds of thousands in student debt. Obviously UK lawyers have student debt too, but the US levels dwarf it, and the way their system works the earliest you can get a sniff at a job in a law firm is aged 27 or so, whereas in the UK you could start a TC as early as 22. In order to attract young law grads US firms have to pay obscenely well to make up for the above.
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And they still see fit to not reward their PBS staff. Give it a couple of weeks and there’s going to be a mass walkout
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The CMS NQ pay announcement is a joke. They’ve upped NQ pay by an insane amount over the last 5 years to try to prove something to the market, whilst giving their other associates pay rises which don’t keep up with inflation.
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I really couldn't give a toss who has hired the most expensive NQs. It is the senior lawyers (usually just below partner level) who bring the real value add. I want the firm with the better senior lawyers. Not some smarmy over important (and over paid) twenty somethings.
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@Anon 15 July 22 09:00
Thanks for the explanation. You’re right that it’s controversial and Bakers isn’t the only one that gets away with the difference.
Many US firms do pay UK associates US rates so affordability seems more like an excuse.
Also arguably UK and US NQs have similar or equivalent education, qualification and training, and probably work on the same international transactions.
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This is perverse and will not end well. Golden handcuffs with the mother of all recessions commencing… I just hope those juniors don’t believe the hype
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@09:34 In House Counsel
1. Nobody gives a shit what you want, at all.
2. The better senior lawyers need good juniors to function as better senior lawyers. Otherwise their time is taken up with tasks that they can't kick down to the mediocre juniors and checking their mediocre work.
3. There won't be many better senior lawyers at Links or A&O in 5 years because the good midlevels who would otherwise have become better senior lawyers will leave and they can't lateral anyone.
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We have now reached the point where business services and technology investment budgets are actively being cannibalised by firms to keep hiking trainee and associate pay. Doing that as we head into a recession is very short-termist, particularly with the data out today showing 70% of corporate legal departments are already spending beyond their budgets, meaning a clampdown on fees is coming. It's also entirely insane for law firm leaders to continue to increase their fixed costs like this instead of allocating more money to compensation elements like budget pots, which can be flexed dramatically in line with business and individual performance.
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@09.34
I am aware as I have also worked in private practice. I am also aware that there is a huge amount of dross at the junior level. Great junior lawyers improve service by a small percentage. They are not the game changers.
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Those talking about US v UK firms are missing a key fact: HSF is also paying more than A&O and Links, and they aren't US.
For those junior lawyers at A&O and Links concerned about what this means for them, just imagine what is happening to your senior colleagues. Your existing pay rises have been at their expense. And think about what that means for you in your long term career, both being managed by resentful senior/managing associates who know they've been given the short shrift because of you, and what it says about how long the firms really want you to hang around.
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@09:34 In House Counsel
You might only be interested in the senior lawyers, but unfortunately those senior lawyers have a habit of retiring/dying/going off to play golf. And if there isn't a pipeline of junior lawyers who've worked alongside those senior lawyers (picking up the technicals and the soft skills through osmosis) then suddenly you have no competent lawyers to advise you. At which point the law firms you're instructing have to start lateralling in other lawyers - which requires massive pay packets to get them in, and then you're back to square one.
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Dramatically increasing your fixed costs is a great way to guarantee that you will need to make redundancies during a recession. Any smart managing partner would be growing the discretionary bonus pool instead of hiking salaries right at the point that certain practice areas begin to look ominously quiet in terms of pipeline.
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Winter is coming.
You won't be complaining about the lack of salary hikes if firms like A&O who haven't upped salaries begin disappearing less people than the firms who have because of prudent planning.
Once the lending stops... god help us all for what lies beyond the wall.
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lol there's no chance that anyone wrote they regret going to LL instead of FF 😭
Also pretty certain LL sees HSF and other more robust international firms as its present-day rivals rather than the remainder of the (increasingly Clyde & Co esque) MC and the sorely one dimensional US firms.
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Urgh. These salaries make me realise what a wasted career I have had.
I earn less than 70k at nearly 11 pqe in the regions. What a waster.
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Don't despair 12;57, I took a big paycut to leave a City firm, never been happier.
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Most if not all of the associates between 2-6 PQE are either contemplating a move, taking interviews with US/UK firms that respect their staff more by paying fair remuneration, or serving their notice period. This firm has been annihilated by the management’s foolishness.
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Some of these firms need to be budgeting for 10%+ falls in revenue over the next 12 months.
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The entitlement and hubris evident from some of the people above is remarkable. If pay truly reflected ability and contribution to society, we lawyers - especially us City types - would be paid relatively little.
The idea that some minion - and I've been one of them - doing shit boring transactional dross with at any firm deserves this on any other basis than to offset the cost of their personal life is ludicrous.
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@Micado
there is something called
“the market”. Ever heard of it?
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Micado, you are quite right in that, intrinsically, lawyers in general and City lawyers in particular have little value in society. The point you are missing is that these people are making the partners of the firms richer on the basis of the market prices for the work of their lawyers.
When A&O is brandishing stories about how their exceptional growth is pushing PEP to £2m, the fact they have decided to freeze salaries at the same time says everything you need to know about how much they value those lawyers - let alone the rest of their staff. The incompetence of the PR messaging alone for running these stories within weeks of each other should tell you everything you need to know about how well run that firm is. Short-sighted clowns.
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Given the amount of cash at stake, I wouldn’t be surprised if there are PR/HR interns commenting above.
It’s bizarre how many commenters seem to be trying to justify a refusal to increase salaries as a prudent business decision. You’re either shills or bootlickers.
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Bakers pay an average salary, that's why some many PBS staff are leaving, taking a lot skill and experience with them. To make it worst Bakers don't replace these staff, you just have to do extra work. This is where they got the money from to give the pay rise.
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@Micado
Lawyers tend to be among the intellectual elite in a country. Admittedly, ROF highlights weekly why this might not be the case, but still, one may still strive to be a pillar of society. And considering the direction in which society at large is going, that would be valuable in itself.
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Why would anyone work at LL or A&O when you can go to CMS or Simmons or somewhere and do 30% less hours, with a higher % of normal humans (still not everyone....) and more prospects for promotion and only earn about 50 quid less a month net.
I've heard rumours of NQs at CMS type places getting married, having kids and even socialising. Madness.
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"You won't be complaining about the lack of salary hikes if firms like A&O who haven't upped salaries begin disappearing less people than the firms who have because of prudent planning."
You seriously think that A&O won't be "disappearing" just as many people as any other firm if there is a downturn? This is nothing to do with "prudent planning" and everything to do with diverting funds from the staff to the partners so they can prop up their PEP, all in the name of the US "strategy".
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Just remember, law firms continuously jacking up their rates to keep increasing salaries in times of high inflation is in no way itself inflationary.
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Hearing about magic circle associates in disputes in particular looking very nervously at an empty pipeline of work after the summer.
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Anyone care to explain why a firm hiking salaries by a third in 5 months shouldn’t get an absolute battering from the press and politicians for fuelling inflation?
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…perhaps it’s because a few hundred lawyers getting big pay rises isn’t really expected to create even a minor ripple in the average salary of a working population of more than 30MM?
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Which MC's areas are most in trouble? Transactional? Head disputes associates are feeling real scared at the moment...
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Ah the PR/HR bod is out in force again. Here's a tip: If you credibly look like a variety of different posters, try varying your syntax and vocab a bit more, and try a slightly different message.