The yearly contest to attract new talent has started with Magic Circle duo Slaughter and May and Linklaters both making salary hikes of over 5% for junior lawyers, while Hogan Lovells kept pace by bumping its junior pay up to match Slaughters’ £70,000 newly-qualifieds’ (NQs) salary.
Although Linklaters reported its NQs received a £3,500 pay increase to £68,500, this was still behind Slaughters, which has traditionally been a bellwether of trainee and associate salaries among the Magic Circle and gifted an 8% wage bump to NQs, taking them to £70,000. However, Linklaters’ salary bands were increased more aggressively higher up the associate ladder as both two and three-year post-qualification experience (PQE) lawyers were given sizeable salary increases that topped Slaughters.
Hogan Lovells again matched Slaughters’ pay for NQs – the same as in 2014 – in a move that also saw it overtake rates offered by Linklaters. The decision caused some contention at the transatlantic firm as it emerged that first-year PQE lawyer pay operates on a salary band ranging from £66,500 to £75,000, meaning those at the bottom of the band could in theory be paid less than NQs.
The rises come amid increased competition for talent in the City as US law firms seek to build out their capabilities. UK-bred law firms still have a long way to go to match US firms’ English NQ rates, including Akin Gump Strauss Hauer & Feld, Davis Polk & Wardwell and Sullivan & Cromwell, which all pay out £100,000 salaries, while the aggressively expansive Latham & Watkins currently offers £98,000.
A partner at a US firm told Legal Business: ‘These salary increases won’t make much difference. The kids coming out of university are much savvier about the market – they are the brightest and the best. They’re not swayed by a few thousand pounds, but more intangible things like wanting to work closely with partners, not being part of a big machine, having responsibility and working on high-quality deals. US firms do dangle the Yankee dollar, but they provide the validation, training and working environment young lawyers want more than their UK counterparts.’
sarah.downey@legalease.co.uk
Slaughter and May’s new salary bands
Trainee year 1: Up 3% from £40,000 to £41,000
Trainee year 2: Up 3% from £45,000 to £46,000
Newly qualified: Up 8% from £65,000 to £70,000
One year’s PQE: Up 8% from £70,000 to £75,500
Two years’ PQE: Up 10% from £79,000 to £87,000
Three years’ PQE: Up 8% from £89,000 to £96,500
Linklaters’ new salary bands
Trainee seat 1: Up 5% from £40,000 to £42,000
Trainee seat 2: Up 4% from £45,000 to £47,000
Newly qualified: Up 5% from £65,000 to £68,500
One year’s PQE: Up 5% from £70,500 to £74,000
Two years’ PQE: Up 7% from £82,000 to £88,000
Three years’ PQE: Up 5% from £93,500 to £98,500