Clifford Chance (CC) is the latest Magic Circle firm to reveal its 2016/17 pay bands for newly-qualified (NQ) lawyers. Having taken effect last month (1 May), the inclusion of bonuses sees a rise in NQ pay at £85,000 compared to £70,000 before bonuses in 2015.
The move follows Freshfields Bruckhaus Deringer folding a discretionary bonus into salaries so NQs have an extra £17,500 in their pay packets this year. The Magic Circle firm lifted NQ salaries by 26% to £85,000.
At CC year one trainees will receive a £1,500 boost to £43,500 while year two trainees will see an increase to £49,000 from £47,300.
CC London managing partner David Bickerton said the firm rewards total compensation based on ‘contribution to the firm’s success over the course of the financial year. This is made up of a fixed salary and a bonus which varies according to contribution made.’
In the early years (NQ and post qualified equivalent (PQE) year one lawyers) individuals’ contribution is assessed on the basis of whether or not they are acquiring certain skills and habits, what CC has dubbed being an ‘exceptional’ lawyer.
Bickerton said: ‘If the lawyer is developing the skills and habits they will require they will receive the binary bonus, so the vast majority of junior lawyers will receive it.
For lawyers above PQE 2, total compensation ‘reflects an individual’s contribution to the firm.’
The firm published expected average compensation levels for those who have made a ‘good’ contribution and for those who have made an ‘exceptional’ contribution.
2PQE salaries, which were at £88,000 last year, are averaged at £100,000 and £119,000 for ‘good’ and ‘excellent’ performance respectively. For 3PQEs salaries for ‘good’ contributors average at £111,000, while ‘excellent’ performers may receive about £130,000.
Last month, Shearman & Sterling boosted salaries for newly-qualified UK lawyers £7,000 to £95,000 for this year. Rises of between 7% and 10% have been dished out across the associate ranks, with more experienced associates set to trouser up to £12,000 extra a year. The salary increases took effect from 1 May, 2016.
In March, Linklaters announced its NQs could take home at least £81,000 including bonus, with high performers on average earning £91,000. This is up on the basic £68,500 salary newly-qualified lawyers at Linklaters earned last year.
CC’s new salary bands are as follows:
Trainee year 1: £43,500
Trainee year 2: £49,000
PQE year 1 total compensation £95,000
PQE year 2 average: £100,000 – good contribution
PQE year 2 average: £119,000 – excellent contribution
PQE year 3 average: £111,000 – good contribution
PQE year 3 average: £130,000 – excellent contribution