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Latham & Watkins London office latest to up NQ pay to £124k as US salary war rocks UK

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Megafirm follows UK arms of Kirkland and Milbank into ‘MoneyLaw’

pounds-twenty

Growing numbers of English law graduates who are barely out of university will be handed massive amounts of money as the effects of a US pay war hit London.

Yesterday it was Kirkland & Ellis and Milbank Tweed Hadley & McCloy that upped pay for newly qualified (NQ) solicitors fresh out of their training contracts to an incredible £124,000.

And overnight news has reached us that the London office of another American giant, Latham & Watkins, has followed suit — ramping up its previously market leading NQ pay from £101,000 to the new £124k figure (rising by nearly £15,000 a year to £216,500 for an eight-year qualified associate).

See the photo of the internal Latham memo leaked to US legal blog Above the Law below. And note that it includes London!

Above the Law
Above the Law

With Latham offering a chunky 20 training contracts each year — substantially more than Kirkland’s 12 and Milbank’s five — the move is significant in that it will put pressure on other firms to follow.

Why is all this happening?

Well, as we explained yesterday, it began earlier this week when elite New York law firm Cravath Swaine & Moore hiked its new starter salary from $160,000 (£110,000) to $180,000 (£124,000), sparking a host of other firms to do the same — in the US.

Where things got a bit crazy was when Milbank opted to apply the rises in London too. This was unusual because pay for very junior lawyers in America is typically much higher than in the UK — as law school takes longer in the States, doesn’t include sponsorship and sees graduates enter firms without having to do a training contract but carrying heavy debts. So Milbank’s English NQs, who will have had the cost of law school covered by the firm, are getting a great deal.

Within hours Kirkland & Ellis London had followed Milbank’s lead — and now Latham has done the same. What happens next is anyone’s guess.

Interestingly, yesterday afternoon Freshfields brought in the same pay rises in its US offices but not in London. However, with three US firms now paying English NQs £124k, the magic circle and other elite law firms in London will come under huge pressure to up their pay.

A new tier of law firms, which the US press has already dubbed ‘MoneyLaw’, is being created. Who joins, and where this leaves those that don’t, remains to be seen.

53 Comments

Anonymous

The more they pay, the clearer it becomes that you’re doing a deal with the devil himself.

(27)(16)

Anonymous

Spoken from a position of ignorance not experience. Complete fallacy to believe that you work harder to get paid more . But believe that if it helps you sleep better at night.

(23)(2)

Anonymous

Hahaha! Exactly!

Mate if you are naive go on and believe in all these ferry-tales of partnership prospects, friendly culture and work/life balance. To me, these just represent vague promises whereas cold, hard money represents real, tangible compensation for the long hours you will have to give up as a corporate solicitor – irrespective whether it is Sheds or Latham you’re signing your life away to.

Since you’re in this anyway, you might as well make it count.

(22)(0)

Anonymous

You say “since you’re in this anyway”.

There is, of course, the option of doing something useful with your career.

(5)(5)

Anonymous

Well, you are obviously more than welcome to make a difference in some NGO.

Just remember to be well preped when explaining to your soon ex wife, around your mid 30s, why you’re unable to afford a house in London and that your two lovely kids will have to go to a state school.

Legal Aid Lawyer

What you’ve never had, you never miss.

And there are some damn good state schools outside of London…

Anonymous

With the money you earn as a corporate lawyer you can do more good than at an NGO..

Anonymous

London has the best state schools in the country.

Anonymous

Buy a house in London, whatever for? I quite like being married to my spouse, and he’s allergic to the south east. Fortunately those of us in do gooder law can live rather nicely elsewhere.

Gatorpoon

#chippyplebspotted

Anonymous

When do they get time to spend their salaries surely on this wage you are chained to your desk

(10)(9)

ALawyer

With potential earnings of £1.8 million by the time someone reaches 34 it would not take long to earn enough to retire when I am sure they can spend the money.

(22)(2)

Anonymous

When there’s an article about high street firms you don’t see the City boys go in and criticise their choices (ok you do sometimes, but not as often). The kind of people who go into this kind of thing know what they are getting themselves in for, and they might actually enjoy it and get career satisfaction from it.

My point is, can’t we all just respect eachother and get along? Do lawyers have to constantly snipe at eachother?

(45)(3)

Anonymous

We all went to the same law schools and some clearly think that we should all be earning the same. Life isn’t so simple. Big law firms have big clients with bigger pockets, so big law firms charge more and associates get paid more. It isn’t rocket science.

(15)(2)

Be pleasant

This man is making insanely good sense to me.

That said its a double edged sword – part of me loves coming here to read the bigoted, cynical and spiteful comments of some lawyers.

(4)(1)

Deal monkey

I kno rite, it’s such top bantah!!!

(5)(2)

Anonymous

For the amount they are getting paid, I suspect a substantial portion of the salary will be spent on anal lube, which can be ordered online or alternatively a secretary or trainee may pop out to get some for them.

(11)(11)

Anonymous

Premiership footballers work as hard as second division players – they just get paid more. Same is true for lawyers. They all work pretty much the same in the City – some just get paid more.

(11)(2)

Anonymous

Hmm not entirely true. Premiership players typically go further in cups, about 30% play in Europe and they’re more likely to be on international duty during the season too.

(6)(1)

Anonymous

“Lube” post written by a partner at another firm who is clearly bricking it that she/he will have to increase their own firm’s pay bands and they won’t be able to award themselves another six figure salary hike to themselves this year. Get over it!

(14)(1)

Anonymous

I have worked in a West End law firm, a national, a magic circle and US – and they worked me the same in every firm. You simply get paid more as the clients get charged more. In the top US firms, clients are often huge and deal sizes are in the hundreds of millions and billions.

(20)(3)

Padding power

What’s the effect of this salary frenzy on hourly rates? And are the Courts going to increase their cost awards to force losing parties to pay £500 an hour for some wet behind the ears learner litigator to gain work experience? Someone, somewhere has to pay for this.

(3)(1)

Anonymous

More like wet between the legs!

(4)(1)

Anonymous

Its about time they hiked up pay bands – this hasn’t taken place for a long time.

(14)(0)

Anonymous

Now hopefully all the other firms will follow suite. Please.

(17)(0)

Anon.

Addleshaw clearly don’t have to.

(8)(2)

Disgruntled

Neither does Reed Smith.

Markets itself as a big US law firm, pays less than many British firms. Utter joke.

(28)(1)

Anonymous

Who’s Reed Smith?

(42)(1)

Idi Amin

Savage. The office view is nice tho.

The Chinny is a lie

…but, but, I was told by Danny, the friendly recruiter, that Irwin Mitchell is the best firm to work for in the City?

He promised me fountains of gold, piles of Bolivian marching powder, a brand new Rolex Daytona as a signing up gift and luscious Eastern European ‘assistants’ who’d squat down under my desk whenever I needed a morale boost…

Where’s my pay raise? 🙁

(22)(1)

The Chinny is a lie

And all the swimming pools I could poo in!

(2)(3)

Irwin Mitchell claims monkey

Top bants blud.

(5)(1)

Hmmmm

Does anyone else feel these pay rises are starting to get a bit unsustainable?

(5)(14)

Anonymous

Nope , keep them coming .

(30)(0)

Anonymous

Why? If the law firms are making mountains more cash, then there is plenty to go around. Equity at these top US firms averages $3m, so paying their associates more is chump change to them.

(11)(0)

Anonymous

Yes but a couple of the SC have really good PEP so why aren’t they significantly increasing NQ pay ?

(2)(1)

Realism please

Because they don’t have to. People will still keep rapping on their doors, no matter how shit the pay.

For the vast majority of us out there, ~£65k is still far better than grinding it out at minimum wage.

(5)(2)

Anonymous

So why are the US firms increasing salaries ?

Retardo maximo

Because they have a ‘one firm’ approach, which aside from the buzzwords, means that you need to match the salaries you offer to similarly qualified staff in NYC, etc.

I don’t believe a single SC firm is headquartered and has most of its offices in the US (KWM actually have them in China lol), so why should they do so?

Are you seriously this stoopid?

Anonymous

I’ve got a magic circle VS coming up, reckon i did well in my second year results, coast to the corporate law holy grail seems pretty clear from here.

but.. the closer I’m getting.. the more distant it is from what i really want.

i thought this was a job i could learn from some exceptional training, become a thorough professional etc. the closer i am, the clearer it is that you are a glorified slave, enticed by more and more bucks

(6)(4)

Anonymous

Good luck with your coasting into corporate law, you might find it’s somewhat more of an effort than what you have in mind!

And if you don’t want to be a slave, then you don’t have to go to the MC, nor do you have to work in the City – plenty of excellent firms in the West End or, dare I say it, outside London.

(11)(3)

Gus

Outside London?

“Here be dragons”

And there’s still no electricity or running water!

I’ve heard they still have public hangings in the market square in Aylesbury!

(15)(0)

Anonymous

Dunno about that Aylesbury, but I head Luton and Birmingham are almost there.

(5)(1)

Irwin Mitchell claims monkey

Savage bants son, 9/11.

Anonymous

It’s good that you’re thinking about these things early. I recommend that you go on the VS, get your TC (the vast majority of VS participants get an offer) and then do your two years. Having the MC firm on your CV will make it easier to move around to what you really want later.

(13)(1)

Anonymous

That is a truly extravagant pile of cash.

Anyone know how much other City professionals are paid at the same stage in their careers (eg investment bankers)? Are Latham NQs the highest paid?

(2)(0)

Anonymous

Unlikely – investment bankers at the top BB banks will be on £95k-£110k salary around this point (Associate 1) but their bonus far greater.

(2)(1)

Anonymous

Smart move by Cravath with an impending crisis ahead to force its competitors’ hands.
When the crisis hits, International US firms (read Latham) will either bleed or be forced to cull (read Latham) their associates and sustain a huge rep loss.

(4)(1)

Anonymous

Interesting observation. I guess since Cravath only have two offices (NYC and London), their exposure will be rather limited. However, given Latham’s reputation (google ‘Lathamed’), they might be able to sail through any crisis.

Anyone know if Latham also hiked compensation in its European/Asian offices like Munich, Moscow or Hong Kong?

(4)(1)

Anonymous

Given Latham’s revenue figures, they should be fine in a crisis. Lower tier US firms that are forced to match may not be so lucky.

Latham hiked salaries across all US, Middle East and Chinese offices, with a few left unmentioned (Moscow, Singapore and a handful of others).

(2)(1)

Anonymous

Selling your soul it may be, but it’s almost £100k more than you’d get paid as a NQ in Scotland. Swings and roundabouts if you ask me.

(5)(0)

Gatorpoon

NQ in Scotland.

Mega lol.

(3)(4)

Anonymous

Akin Gump joins the £124k club.

(1)(1)

Comments are closed.