Firm goes to the top of the magic circle pay league
Magic circle outfit Freshfields Bruckhaus Deringer has leapt up the City law pay table with the announcement that it is upping junior solicitor pay by a staggering 26% to £85,000.
The Anglo-German outfit’s newly qualified (NQ) lawyers are now the top earners among their magic circle peers. Before their pay packets were boosted by £17,500 today, Freshfields NQs were the worst paid within the elite band of City firms, pocketing £67,500, albeit with the possibility of a bonus.
That bonus is believed to be no longer on offer, with the firm stating that the new salary “exceeds the previous salary and bonus combined”.
Trainees at the firm have also received a pay increase — of a slightly more modest nature. Both first and second year trainees have seen salaries increased by £2,000 each. Those in the first year of their training contract will now pocket £43,000, up from £41,000 (a rise of 4.3%), and those a year ahead will take home £48,000, up from £46,000 (an identical rise in percentage terms).
With Freshfields junior lawyers sitting pretty at the top of the remuneration table, Linklaters — which announced a pay increase earlier this year — is nudged into second place, paying its NQs £81,000. Fellow magic circle outfit Allen & Overy — which hasn’t upped pay for 2016 yet — sits in third place, with NQs walking away with a cool £78,500. With Slaughter and May revealing a muted pay increase of just 2% to £71,500 earlier this week, junior lawyers at Clifford Chance — who are yet to receive a 2016 pay increase — are left languishing at the bottom of the magic circle pay rankings.
Today’s money boost will be welcome news for the hard working lawyers at Freshfields. Last summer there were whispers of discontent around the corridors of global giant’s Fleet Street office as senior lawyers at the firm opted to freeze pay for NQs and chuck trainees an extra £500. All in a year when average equity partner drawings at the firm scraped the £1.5 million mark.
On the back of the cash windfall for Freshies’ junior lawyer talent, Julian Long, London managing partner, proclaimed:
Our ability to attract and retain the most talented individuals is critical to our continued success. Our combination of high quality work, client interaction and global platform mean that our trainees and associates experience an outstanding start to their career. Obviously we should not underestimate the need to be competitive with regards to pay in our market; we believe that making changes across the board for our trainees and associates maintains our strong position as one of the most attractive firms in the market.
With three out of the five magic circle firms announcing pay increases this year an interesting two-tier split is beginning to emerge. There is now a gap of £15,000 between the top and bottom earners at NQ level within the City’s elite band of firms. All eyes will be on Canary Wharf and Clifford Chance over the comings weeks. Will it keep pace? Or will it do a Slaughters and take a more conservative approach to remuneration?