A further reminder comes this week that despite much talk of the pressure on the legal market (see Comment: Things I would have said about the future of law if I hadn’t forgotten my notes), leading City players continue to be highly profitable with Linklaters announcing on Tuesday (7 May) that it is raising its salary bands for associates. Continue reading “Old normal update – Linklaters outpaces Slaughters to hike starting associate pay by £2,500”
Slaughter and May today (30 April) became the first major City law firm to announce a review of its associate pay bands – triggering minor rises in the underlying rates its lawyers earn from trainee level to three years post-qualification.
Newly-qualified see salaries rise from £61,500 to £63,000; one year PQE pay rises £500 to £69,500; two year PQE from £76,500 to £78,000; three year PQE earn an extra £1,500 at £87,500. Trainee salaries are up by £1,000, increasing to £39,000 in year one and £44,000 in year two. The rises kick in from 1 May.
As partnerships continue to take a cautious approach to profit distribution, SJ Berwin has confirmed that it has released profits that it withheld in February.
The firm’s profit per equity partner (PEP) increased by 1% between 2011 and 2012 to £635,000 with revenues up 1% to £180.1m. According to the firm, the February distribution was held back as a matter of caution in light of a large tax bill in January.
The practice is becoming increasingly commonplace – in March, Field Fisher Waterhouse withheld their partner distribution, citing the firm’s investment plans as the reason for the delay. The firm saw its PEP drop by 16% in 2011/12 to £434,000 against a revenue increase of 4% to £97.6m.
Allen & Overy has increased trainee pay rates bringing to an end a three-year freeze and has promoted 24 lawyers to the role of counsel.
The Magic Circle firm is the first to raise the stakes amongst its peers this year, with second-year trainee rates increasing by £800 to £44,000 – £200 less than the previous increase in May 2010, where pay packets grew from £42,200 to £43,200.
It’s a sobering sign of what we’ve been reduced to when we’re praising firms for doing the obvious. This time it’s the pioneering technique of holding a little cash back to cover investment, working capital and future partner drawings, rather than doling it all out to equity partners almost as soon as it comes through the door.
Field Fisher Waterhouse (FFW) and Dentons are the latest proponents of the dark art of prudence – FFW confirming it would hold back its ‘special’ profit distribution in March, while Dentons has delayed some payments over the last 18 months from the 2011/12 financial year.
Pay for male lawyers in the UK is significantly down from 2011, while women enjoyed a small rise in salary in 2012. Despite this sliver of positive news, the gender imbalance continues with male and female lawyers still receiving dramatically different treatment. The profession still has a long way to go.
Recent research from recruiter Laurence Simons found that average pay for male lawyers – both in-house and in private practice – was down £5,000 on 2011, while pay among female lawyers was up by nearly £1,400. Even considering this feeble rise, men on average in the legal profession made over £50,000 more than women last year. Average salary for male lawyers was £162,689 compared to £111,293 for female lawyers looks pretty bad.