Magic circle top payer opts against raising NQ pay above £85k, dashing ‘100 Club’ dreams
Freshfields to stick rather than twist
Magic circle outfit Freshfields Bruckhaus Deringer has confirmed that the pay packets of its junior and trainee lawyers will remain unchanged, all but ending hopes of a magic circle firm reaching the £100,000 mark for rookie pay in 2017.
Last year we reported that the firm had bumped newly qualified (NQ) salaries by a staggering 26% to £85,000. Meanwhile, trainee pay enjoyed a modest 4% uplift across both years, taking pay packets to £43,000 and £48,000 respectively.
Following a review of salaries over the summer, Freshfields has now opted to keep its NQ and trainee remuneration at its 2016 rates. Nevertheless, associates — who are eligible for bonuses of up to 20% of their salary at 2PQE level and above — will continue to move up through the pay bands and collect their rises as normal.
So how does Freshfields’ NQ salary stack up against it magic circle rivals? Well, thanks to a series complex bonus structures, it’s not actually that clear.
Clifford Chance’s NQs can earn up to £85,000. This figure includes a bonus that the firm says the “vast majority” of its junior lawyer talent will receive. The Canary Wharf-based giant has yet to disclose whether whether it will be upping NQ pay this year, but the chatter is that any rises won’t be substantial.
Meanwhile, Linklaters (matching Allen & Overy’s 2015/16 increases) bumped junior lawyer pay to £78,500 back in June, but says “high performers” could pull in northwards of £90,000 with a bonus. Finally, Slaughter and May — which boosted NQ salaries to £78,000 (up 9%) at Christmas — confirmed that it had frozen pay this summer.
Julian Long, Freshfields’s London managing partner, said:
After the major revamp and increases in 2016, we have continued to review our competitive position, which, in terms of total compensation, remains strong in the market. We will continue to review and update, taking account of the market, in order to make sure our approach properly rewards our people for the work they do and the high standards they consistently achieve.
The magic circle are facing increasing competition from US rivals, which are increasingly bulking up in London. As the Legal Cheek Firms Most List shows, there are at least 15 American outfits offering London rookies over £100,000. The members of this ‘100 Club’ include Kirkland & Ellis, Akin Gump, Latham & Watkins, Milbank, Cleary Gottlieb Steen & Hamilton, Sidley Austin, Skadden, Ropes & Gray, Weil Gotshal & Manges, Davis Polk & Wardwell, Gibson Dunn, Shearman & Sterling, White & Case, Sullivan & Cromwell and Jones Day.
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