Freshfields Bruckhaus Deringer today (29 May) unveiled a significant pay hike for its newly qualified (NQ) and junior ranks, with trainees also in line to take home £1,500 more, following a pay freeze in 2013.
The Magic Circle firm upped pay packets for first and second year trainees to £40,500 and £45,500 respectively.
NQ and one year post qualification experience (PQE) lawyers – known as career milestone (CM) foundation – will see their pay bracket rise from 2012’s level of £65,000 – £72,000 to £67,500 – £77,500.
Associates of between two and four years’ PQE (CM1) will now receive between £87,500 – £100,000, compared to £80,000 – £92,500 in the last two years, while associates with over four years’ PQE (CM2) will take home between £107,500 – £115,000, up from £100,000 – £107,500.
Associates that have six years’ PQE (CM3) will be paid between £120,000 – £135,000, an increase from last year’s starting point of £115,000, although no upper limit was specified.
Freshfields’ increases this year puts the firm ahead of Linklaters, which has been leading the pack, paying its NQ lawyers £65,000; one-year PQE associates £70,500; two-years PQE £82,000; and three-years PQE £93,500.
A&O, in comparison, lags behind its peer group after choosing to stick to last year’s pay levels. NQ lawyers will receive £64,000, while one-year PQE will take home £69,500, and second and third years will receive £78,500 and £89,000 respectively.
Despite the firm freezing its pay bands last year, Freshfields still led the pack with its high 2012 rates in comparison to its Magic Circle peers. Clifford Chance is the last to announce its trainee/associate pay bands with an announcement expected in the next few weeks.
Freshfields’ London managing partner Julian Long said: ‘We make sure we offer the most talented individuals a combination of great work, great training – and market leading levels of compensation. We have maintained our leading reward position for a number of years. We are now making a further significant investment in our people to recognise and reward outstanding performance…and we our investing further in bonuses. This move is part of our strategy to attract and retain the most talented individuals in the market and secures our position as a leading investor in exceptional people.’
The firm introduced the CM pay bands in 2012 to replace the previous system of pay based purely on PQE, claiming it was a more accurate way of reflecting both the lawyer and business roles that associates perform. Progress between each milestone is tracked using seven key elements, including technical skills, people and team skills and project management.
The milestone pay bands are being used by the firm’s London and Asia offices, with the firm’s other network offices currently at different stages in implementing the career milestones. ‘Most offices introduced them as part of last year’s appraisal process either to support personal development planning or when assessing performance,’ the firm said in a statement. The firm also confirmed it will be investing further in the bonuses it offers.
All pay increases went into effect May 1, 2014.