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Shearman & Sterling blitzes magic circle with trainee and NQ pay rises

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London office of US firm asserts pay supremacy after recent rises by Linklaters and Slaughter and May

Salarywar

The escalating junior lawyer pay war among English law firms has been put into perspective after the London office of US giant Shearman & Sterling upped its trainee salaries to £50,000 and started paying newly qualified (NQ) associates just shy of £90,000.

London trainees at the New York-based firm will now earn £45,000 in their first year and £50,000 in year two, before qualifying on an NQ salary of £88,000.

The rises represent an increase of around 14% for trainees, who previously picked up a mere £39,000-£44,000, and 6% for NQs, who used to scrape by on just £83,000.

Such sums will no doubt have magic circle trainees and rookie lawyers looking on enviously. Last month Slaughter and May raised its NQ pay to £70,000 — a figure matched last week by Hogan Lovells — to make it the leading payer of wet-behind-the-ears solicitors among English-headquartered firms.

Meanwhile, on Friday Linklaters increased its trainee salaries by 5% to between £42,000-£44,000 to seize the magic circle’s trainee pay crown.

But who cares when you have a bunch of US firms’ London offices putting these figures in the shade?

Students of the Legal Cheek Most List will be aware that Shearman & Sterling isn’t even the top paying member of this plucky bunch of Americans. Eight firms pay their London associates more than the £88,000 offered by Shearman, with the top payers — Akin Gump, Davis Polk, Sullivan & Cromwell — all hitting the £100,000 mark. Two of these three also exceed Shearman’s trainee pay.

The problem with US firms? It’s not so much the work — they work you hard, obviously, but then so of course do the magic circle — but the lack of training contracts.

Shearman offers 17 annually — which is quite high for a US firm in London — while pay leaders Akin Gump, Davis Polk, Sullivan & Cromwell hand out just 4-6 each year. By contrast, 110 trainees start at Linklaters’ London office each year.