Having enjoyed another respectable financial performance for the 2014/15 year, Travers Smith has boosted its newly qualified (NQ) associate salaries by £6,000 to £70,000 from £64,000, constituting a 9% rise and putting its rates on a par with Slaughter and May and Hogan Lovells.
Speaking to Legal Business on the 9% pay boost, managing partner David Patient (pictured) said: ‘Why £70k? That’s where we think we need to be in this market – we have terrifically talented people we want to reward properly – it’s very competitive out there. It’s specific to the type of work we do, corporate and disputes, and giving an incentive to retain top talent. To do high quality work you need high quality people. We have that. To have them you need to pay high quality salaries. Full stop.’
Patient added that the wave of US firms offering mid-Atlantic salaries is not of major concern to the firm: ‘I don’t lose any sleep [over losing associates to US firms] but we’re in a market at the moment that’s very competitive. If you look at websites that publicise US law firm salaries they are considerably higher than those at the leading UK firms. Inevitably that may turn people’s heads. You have the so-called “diamonds and deposits era” in your life where you want more money. But the UK firms aren’t going to compete on salaries with US firms – I question how sustainable that is for lots of them. If a US firm is competing for work in London the pressure on fees will mean there will end up potentially being downward pressure on salaries. They might be having their day but how sustainable is that?’
This year the City outfit, which offers around 25 training contracts annually, posted strong results for the past financial year, registering a 9% rise in revenue to break the £100m boundary. This was buoyed by an active deal market in the City, particularly within the private equity space where high returns on post-financial crisis investments sparked a series of sell-offs.
The firm capitalised on its strong deal reputation to pull in £8.8m extra in turnover to reach revenues of £106m while profit per equity partner rose 6% to £935,000 as the average pay for equity partners rose by £55,000 from last year.
This summer also saw Allen & Overy announce it was gifting associates with a £20,000 increase in their base salaries as the firm incorporates bonuses into the annual pay packet.