It’s often forgotten that City lawyers get bonuses. But a survey released today shows average bonuses at the top corporate law firms stand at a whopping £35,500. That equates to 32% of salary – up from 25% last year.
In a climate where resentment against bankers’ bonus culture abounds, this is the sort of data law firms won't want overly banded around - even if the figures are a fraction of the enormous amounts paid elsewhere in the City.
Despite the rises, the number of lawyers who received a bonus was notably lower than in previous years, with 73% getting bonuses in 2010 compared to 65% in 2011. This is symptomatic of a growing trend since the financial crisis for senior individuals in firms to hoard cash at the expense of associates and junior partners.
Better in Brazil...
The survey – by legal recruiter Laurence Simons - also found base salaries for City lawyers to have risen by 4% to £111,000, taking total annual remuneration to £146,500 once bonuses are taken into account. It leaves UK corporate lawyers pretty flushed, but not as flushed as their Brazilian counterparts, who according to Laurence Simons can expect to receive an average salary of £175,000.
The growth of legal salaries was almost twice that of those in other professions. Accountants, for instance, saw their basic pay increase by only 2.1% in 2011. Across the UK, salaries increased only 1.2% in 2011.
Still, in spite of the rosy figures, 56% of lawyers say they are pessimistic about 2012; a finding that may be related to the high profile redundancy programmes that several firms, including magic circle giants Linklaters and Allen & Overy, have recently embarked on.
Lucinda Moule, managing director of Laurence Simons, linked the pay rises to a limited supply of good quality lawyers in the market: “2011 saw sustained pay growth for lawyers in the UK, on the back of some early economic confidence," she said. "This has boosted legal salaries for professionals who endured pay freezes in 2010. Salaries and bonuses have also been pushed up by the limited supply of talent in their market, making retention the name of the game for employers."
Moule added that it's better to be a lawyer at these firms than a member of their support staff: “There may well be some choppy economic waters to be navigated in 2012, but in the last 12 months employers have demonstrated they are prepared to prioritise investment in legal teams over other business functions."