Analysis

It’s beginning to look a lot like Slaughter and May is calling a recession

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Modest pay rise and work/life perks signal tough times ahead

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Gossip was circulating last week on our magic circle open thread about Slaughter and May announcing a mega pay rise to take its newly qualified solicitor (NQ) remuneration up to £100,000.

Such a boost, the chatter suggested, was necessary to ward off the threat of US rivals paying dollar-tied London NQ rates that — thanks to a weak pound — currently equate to around £142,000. This incredible MoneyLaw movement has generated salary inflation across the high-end City law market, with Freshfields and Clifford Chance raising pay in response to £85,000 and Herbert Smith Freehills taking its NQ rate to £82,000. These are unprecedented sums for English headquartered law firms. And City law rookies have been hoping it was just the beginning.

But alas, the rumoured Slaughters £100k game-changer ain’t happening. On Wednesday the firm announced that it was finally upping NQ rates … by an underwhelming £6,500 to £78,000 plus bonuses. The figure is as low as Slaughters could have credibly gone, being just £500 more than the lowest magic circle payer, Linklaters, which is due a pay review in three months.

Instead of hiking rewards, Slaughters has put in place a host of much cheaper to implement work/life balance measures. Three year post qualified associates will get a paid sabbatical, all associates can now apply to work from home one day a week, and holiday allowance is up to 30 days.

This is very nice, but make no mistake, whatever polite reassurances of delight that Slaughters’ youth give to partners about the firm’s new perks will conceal a growing irritation. The status-obsessed Alpha males and females who join S&M don’t relish being in a lower pay league than their old mates from law school. Amid some recent disappointing scores in the Legal Cheek Trainee and Junior Lawyer Survey — which saw the partners take a real battering — no wonder some are suggesting that the firm has lost its way.

Those keen to write-off Slaughters should be careful, though. Bear in mind that the firm has a history of having the last laugh. From never merging, to declining to open up mass networks of international offices, to shunning lateral partner hires, to ignoring Twitter — Slaughters’ past is littered with decisions that are widely mocked at the time. Yet, year after year, this contrarian firm is the most profitable in the magic circle.

That financial strength is important. Because if Slaughters wanted to, it could compete on junior lawyer pay and win against any English firm. By declining to engage, Slaughters’ partners may be acting prudently rather than greedily. How sustainable is it for London headquartered firms to follow the US-based MoneyLaw crowd on pay at a time when the dollar is set to strengthen and the pound remain weak? And how resilient will the model that many big UK firms are developing — which is seeing them cut trainee numbers in favour of paralegals at new lost support centres in the regions to help support London pay — prove to be in the long term?

The risk associated with these new dispersed and very unequal teams is that they may struggle to maintain good morale over the longer term. US firms’ tightly-knit London bands of lavishly paid hotshots could ultimately prove a more sustainable set-up. And Slaughter and May, which is notably absent from Belfast, Manchester or anywhere else outside the M25, seems to be closer to the latter category in spirit — albeit with a hyper elite brand in place of MoneyLaw pay.

That brand is going to have to work hard. If the economy keeps muddling on and Slaughters continues to be eclipsed on remuneration it will soon stop attracting the best grads and lose status. It’s probably got three years at best. On the other hand, if 2017 is the start of another downturn, City law pay falls and job cuts will surely follow at the firms which find themselves overstretched. Slaughters won’t be one of them. And the firm’s moaning millennials may find themselves rather grateful.

35 Comments

Anonymous

“Gossip was circulating last week on our magic circle open thread about Slaughter and May announcing a mega pay rise to take its newly qualified solicitor (NQ) remuneration up to £100,000.”

No. No, it wasn’t.

(37)(6)
(5)(8)

Anonymous

One person said it. Jesus christ Legal Cheek how have you only just made a article about this. The amount of gossip in that thread is incredible! it must be true!

(17)(1)

Gossipmonger

Lol soz lads, it wuz just banta.

(22)(1)

Anonymous

That’s certainly what slaughters trainees / NQs hoped.

(3)(0)

Anonymous

I hope for a golden unicorn but that doesn’t make it news.

(6)(2)

Anonymous

If you were a large class of people, and you hoped for something relatively attainable, and you did not receive it (you were denied it) despite hard work – it might well make it news to a website dedicated to updating similar groups of people.

(20)(2)

Anonymous

And in other news, Lord Harley…

(3)(3)

Anonymous

Its akin to “Twitter Meltdown” headlines when a couple of idiots post the same thing on Twitter.

(9)(1)

Anonymous

More Christmassy and more fun please.

(2)(1)

Anonymous

Ho ho ho, global warming and Syria.

(6)(0)

Anonymous

Pay rises and more holidays – the certain harbingers of a brutal recession…

(23)(0)

Anonymous

Don’t dispute Alex’s intricate theories – he worked at the Guardian you know!

(12)(0)

Anonymous

On the other extreme end, there are desperate trainee solicitors working on minimum pay or worse voluntarily (at least not on the records) at small / high street firms…..if they are lucky enough to secure TC of course. Such is the dire situation of so many law grads failing to secure a TC.
It seems odd or strange that otherwise good calibre students with a high 2.1 or even a 1st from from non Russell Group non Oxbr

(4)(8)

Anonymous

….are getting left out in favour of Oxbridge and top Russell Group non law grads who have their degrees converted in 1 year by doing GDL.

(3)(11)

Anonymous

That’s just the way things are. Willingly enrolling in a non-Russell Group university in hopes of bagging a half-decent TC is madness.

(13)(1)

Anonymous

What is a half decent tc according to you? I went to a non russell and got a TC at Shoosmiths

(1)(12)

Warwick lad

Oh wow my blind retarded cousin got a TC there. Good thing too, needed a distraction get him off those drugs and stopping him from getting arrested.

(11)(2)

Anonymous

Top bantz.

(3)(0)

More decent Warwick lad

you bring shame to my university with such comments. complete disgrace

(2)(9)

Anonymous

I bagged a TC at Shoosmiths too. I was hired straight out of my Magistrates’ Court hearing for banging seven-gram rocks and minor arson. I got a 3rd from Scunthorpe International College, best LLB course ever.

(12)(0)

Anonymous

The point about morale is a good one. It’s consistently underestimated in organisational performance.

(2)(0)

Anonymous

The pay rise and bonus puts them up towards the top of the MC. There is also another pay review in May. Really a sign of tough times ahead?

(4)(1)

Anonymous

It’s not. Don’t listen to that hack.

(0)(0)

Anonymous

You struggle with Maths don’t you Alex… Add the bonus on to the salary and suddenly the salary increase makes Slaughters equal with the top of the MC. The firm has a lot longer than three years before they lose status as well…

(7)(1)

Genuine Question

Are bonuses guaranteed at Slaughters? And if so, why not just combine that into a salary like the others?

(0)(0)

Anonymous

It depends on PQE and varies year on year slightly. This year it ranges from 9%-16%.

This method is a lot more transparent than spouting ‘the median performers will earn this amount’.

(4)(1)

Anonymous

It’s beginning to smell a lot like nob cheese, everywhere I go!

(4)(0)

1st year law student - LSE

How many years are we thinking until all the MC finally breaks the £100K-threshold for NQs – presuming of course that the economy doesn’t fall off a cliff or anything?

(1)(0)

Anonymous

Entirely possible it will happen next year.

(1)(0)

Bucks new university llb

Hello, do u reckon I cd get a tc w a mc firm lik slaughters or links?

My uni is prestigious nd altho nt a member of rusell grp, many grads get admitted to bpp law school to do the lpc.

(0)(1)

Anonymous

I hear Jones Day announced a new increased compensation package. The partners no longer go bareback.

(2)(0)

Bumcheeks McGuffin

Right. I fancy an argument with somebody. Who wants a fight then? I’ll meet you in Gray’s Inn Square outside the library at 1pm sharp tomorrow. COME ON THEN!

(2)(0)

Anonymous

This is almost offensively ridiculous.

First, slaughter and may increased leave etc in response to an employee survey. This wasn’t an unsolicited jump in leave etc. Second, unlikely -any firm would increase unpaid leave in a “recession”.

Pay? Equivalent with the rest of the mc, with further reviews promised. No issue there. Doesn’t match US firms? Better work/life balance and quality of trainjng evens things out. Trade off is for individuals to decide on.

Overall, this is a pathetic, misguided attempt to interpret the actions of one mc law firm, written by a person who (to the best of my knowledge) has never worked in an mc law firm.

(3)(2)

Anonymous

“Status obsessed alpha males and females who join s&m”….is this for real?

(1)(0)

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