As the associate pay war rages, Thomas Alan finds major firms are falling back on cultural tropes in the expensive jostle for trainee talent
When Freshfields Bruckhaus Deringer announced in May a pay hike for newly-qualified salaries, rising from £85,000 to £100,000 with bonuses on top, new battle lines were drawn in the war for junior talent.
But away from the jostling over associate pay, firms are similarly looking for an edge in securing young lawyers through lucrative trainee pay packages, with some City firms hoping history has a greater pulling power than hard cash.
Within the Magic Circle, the differences are marginal. Linklaters offers trainees a starting salary of £47,000 rising to £52,500, narrowly ahead of Freshfields, which offers £45,000 rising to £51,000. Slaughter and May matches Freshfields’ commitment in both years, whereas Clifford Chance (CC) offers an enhanced package with first-year trainees receiving £46,600 rising to £52,500. Allen & Overy, meanwhile, pays trainees £45,000 in their first year, rising to £50,000.
‘There’s a dichotomy between trainees who take the Magic Circle route and those who go to the big US players, they dont want to be part of an 80-strong cohort.’
Tom Canning, Milbank
Key US players offer broadly comparable salaries. Latham & Watkins pays slightly less than most of the Magic Circle, with trainees receiving £46,000 in their first year rising to £50,000. White & Case offers £48,000 rising to £53,000 after announcing a rise in June, while Milbank pays a lucrative £50,000 rising to £55,000, matching the second-year salary of Kirkland & Ellis.
The differences in absolute terms are slight, and partners are quick to resort to the cliché that money, while important, isn’t everything. ‘It’s an affirmation of the prestige of a firm if you’re in that top pay bracket,’ says Milbank partner and trainee programme head Tom Canning. ‘There’s a dichotomy between trainees who take the Magic Circle route and those who go to the big US players. They take an informed decision: quite often the reason they give is the size of the trainee intakes, they don’t want to be part of an 80-strong cohort.’
White & Case partner Justin Benson echoes the point: ‘Pay for trainees is important but I wouldn’t say it’s the main factor. It’s more about our selling points as a firm with significant strength in the City and the US, as well as our global coverage.’
But the discussion quickly becomes larger than the salaries themselves. US firms argue that their smaller intakes provide trainees with greater responsibility and autonomy from the moment they walk through the door, something Canning says prospective trainees frequently mention in their interviews.
Firms’ spring retention rates inflame the discrepancies between US and City firms’ intake numbers. Freshfields kept 78% of its intake, with 32 out of 41 trainees staying put. CC kept 90% of its trainees with 46 of 51 retained, while Linklaters saw 41 out of a 51-strong cohort remain. At White & Case the numbers are lower. The firm’s spring retention figures show 75% of its trainees remaining, or 12 out of 16. Mayer Brown saw a retention rate of 100%, with all four of its trainees staying on, while Kirkland also saw a 100% retention rate last summer, with all of its ten-trainee cohort opting to put pen to paper.
Not all are convinced US players have a cultural edge when it comes to attracting trainees, stressing the range of experience and level of structured training at top City firms. ‘That’s spin. They would be saying that right now,’ says one Linklaters partner. ‘They don’t want to make it look like they have to pay to get the talent but obviously they do. We’ve still got an edge because of our brand and perceived status.’
However, with the Magic Circle increasingly responding to the higher pay at US rivals with their own increases, particularly as regards associate salaries, some believe the City elite is undermining its own rhetoric on the cultural drawbacks of the US leaders. For now, as the pressure to secure the best talent builds, some of the strongest City firms are having their hands forced.