In the latest sign of pressure to secure the best young talent, Slaughter and May has confirmed it is to pay five-figure bonuses to many associates amid modest salary rises for junior lawyers.
Slaughters today (13 December) announced that associates achieving ‘a good or exceptional level of performance’ will receive a bonus ranging between 9% and 16% of salary, broadly matching the rates the City leader paid out last year.
This bonus applies to all the lawyers in the firm’s PQE band, with NQ to six months’ PQE lawyers in line for a 9% bonus. The bonus increases to 12% for one to two years’ PQE, 14% for two-and-a-half to four years’ PQE, and 16% for four-and-a-half to six years’ PQE.
From January, Slaughters will also increase the salaries of its trainees to reflect ‘current market rates’. First year trainees will see salaries rise from £43,000 to £44,000 with second year trainees rising from £48,000 to £49,000. Newly-qualified (NQ) lawyers receive a £2,000 hike from £78,000 to £80,000, with six-month PQE salaries rising from £82,500 to £84,000. The firm’s one-year PQE salaries are to be increased from £87,000 to £88,000.
Despite the rises for its juniors, there was less cause for festive cheer among mid-level associates – the effective engine room of large law firms – who saw rates held at current levels of £98,500 and £108,000 respectively for two and three years’ PQE.
The pay shake-up comes after Slaughters substantially boosted associate base salaries by 10% on 1 January 2017 with NQ pay increasing by 9%. The Magic Circle firm opted in June to hold associate pay bands for the coming year.
A number of Slaughters’ City peers have already this year pushed through rises to associate pay, reflecting intense demand for the best associates in the Square Mile. Most recently Allen & Overy announced a series of rises to its underlying pay scale, hiking NQ rates from £78,500 to £81,000.
Whether the latest round of rises at London firms will be enough to stop the drain of associates to the City arms of US advisers will be open to debate when many leading US outfits are paying well over £100,000 for entry-level lawyers.
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