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£100k NQ pay is stoking tensions within magic circle law firms

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Senior associates annoyed by big junior lawyer pay rises, says report

Anonymous senior associates from firms including Slaughter and May and Clifford Chance have been quoted in a Financial Times exposé (£) that alleges magic circle law firms are riven with internal tensions over uneven pay rises.

The lawyers expressed dissatisfaction about junior colleagues’ pay rising at a sharper rate than their own, following a string of widely reported salary boosts that have seen newly qualified (NQ) solicitor remuneration packages rise to £100,000 at the five magic circle firms.

The unnamed S&M associate told the FT:

“We are seeing real compression in pay. The headlines are all about the newly-qualified pay, but there’s been very little uplift for lawyers who are two, three, four and five-years qualified.”

Meanwhile the now former Clifford Chance associate talked about “discontent” caused by the NQ pay boosts.

Also quoted in the piece was Linklaters managing partner Gideon Moore, who repeated public laments made last month to Legal Week about £100k NQ pay.

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Commenting on Freshfields’ decision to increase pay for its NQs in May — a move that sparked a host of pay rises at elite law firms across the City of London — Moore said:

“We didn’t understand the need or what purpose the rise was serving. They weren’t matching the US firms and it wasn’t as though we weren’t already getting good people through the door. But like it or not you have to be seen to be competitive in that first wave of salaries.”

He went to explain that clients weren’t thrilled about the salary rises, adding:

“Clients have been clear that they don’t want to pay for the increases.”

Last month Linklaters became the final magic circle firm to up its NQ remuneration package to £100,000.

The flurry of UK law firm pay rises, that has also seen big jumps at other major players such as Herbert Smith Freehills, Hogan Lovells and Travers Smith, has been caused by pressure from mega-paying US firms. At the London offices of these outfits a handful of lucky NQ solicitors are earning around £150,000 — the result of a combination of the relatively strong US economy, the weak pound and pay policies which group English-qualified rookies with their American counterparts despite the lower cost of UK law school meaning they typically enter the profession with far less debt.

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65 Comments

Anonymous

In short: If you start paying more to junior staff, without increasing salaries of senior staff, senior staff may be unhappy.

Great investigative reporting.

(67)(50)

Anonymous

Except it isn’t true, at least not at CC. I got a decent pay rise at 3pqe, in line percentage wise with the jumps NQs got, and I know my colleagues did to.

(2)(0)

Anonymous

The problem is the flat revenue of magic circle firms over the last decade, which ultimately stems from the underwhelming performance of their main clients, the big banks, since the financial crisis.

This was actually quite predictable. Why didn’t they go out and hustle for clients in this cycle’s growth areas like private equity? Because their polite English culture wouldn’t allow it. So Kirkland and the other US firms got onto all the big deals and have left the so called magic circle looking decidedly unmagical.

(58)(7)

Anonymous

That’s a bit of an oversimplification to be fair. Freshfields, for instance, really does have an excellent private equity practice. The issue is not a lack of desire to move into profitable business areas, it’s a cultural reluctance to incentvize EWYK and breaking the lockstep.

(34)(4)

Kirkland NQ

The only shop with an excellent PE practice is the ‘Land. Everyone knows that dweeb.

(14)(30)

Anon

Freshfields corporate department had been eviscerated by US firms. https://www.ft.com/content/6305ae4e-141e-11e9-a581-4ff78404524e

(8)(2)

Kirkland NQ

Cute xoxo

(12)(8)

Anonymous

Kirkland NQ = Topman suit wearing paralegal from Romford

(102)(2)

Kirkland NQ

What is a Romford? Only a good man here geezer.

(3)(8)

Anonymous

A reply within 2 minutes! Good work

(17)(0)

Anonymous

Extraordinary comment from the Links managing partner.

(55)(2)

LL Associate

I agree.

Typical that he disguises his greed by claiming that he would not raise Associate salaries in the interests of clients.

Not like he earns £3m a year and PEP is at an all time high… oh wait

(74)(0)

Another LL Associate

It’s not like me to stick up for the partners, but if they drop PEP then the best partners will simply leave and take the work with them. Assuming therefore that there’s a limited pot of money for raises (and that’s true whatever the partners earn) it seems mad to allocate most of that pot to the most junior associates, surely?

(10)(2)

Anonymous

PEP is irrelevant except as an interesting metric anyway. Most of the rainmakers are on special contracts which effectively break lockstep.

(2)(2)

Anonymous

Not at LL

LL NQ

Quite disheartening to be honest.

I can see graduates being substantially effected by a comment like that – totally unnecessary and serves only to distance employees fromt the partnership.

(6)(3)

Anonymous

There was just an article by some NI high street solicitor about how law firms are run by dinosaur partners looking to exploit associates. Glad to see any type of firm has the equal opportunity to be run by self-interested fossils.

(2)(0)

Anonymous

*affected. Is this what £100k pa buys you?

(5)(1)

Anonymous

I agree with him in a sense but wish LL had attempted to differentiate by some other means rather than simply giving in and paying the “same”.

(0)(0)

Drumpfenkrieg

Who needs these paper pushers? They think they are Gordon Gekko but they only have jobs because of excessive government red tape. Slash the red tape, bin the pen pushers. Job done. Hail Trump, Hail our people, Hail Victory.

(7)(14)

Corbyn fan

Cannot agree more, down with these capitalist Gordon Gekko pushers. Will you join us, comrade?

(4)(5)

Anonymous

After Trump has crashed the US economy, and the UK has narrowly avoided Brexit thanks to a unity government coalition, the Magic Circle firms will come good again in an EU that gets it’s act together and achieves its potential. Hold your nerve fellas

(12)(28)

Anonymous

You’re an idiot. Good night all

(21)(4)

Anonymous

What are you smoking and where can I get some?

(3)(2)

ANONYMOUS

@KirklandNQ- so Latham and Weil aren’t at all worthy competitors for private equity work? Idiot.

(6)(7)

Kirkland NQ - Shoot me I’m

Weil has been going downhill since they lost Stephen Lucas to K&E and Mark Donald to White & Case. Both are top dogs in PE/Debt Finance, and took almost all of their clients with them to their new firms.

(25)(1)

Anonymous

Kirkland is the equivalent of Real Madrid or Man City. Buying out top talent.

(5)(2)

Kirkland NQ

Marco is winding up at Weil so they’ll be sunk soon.

Latham is a decent shop but not quite the ‘Land.

(5)(1)

Ade

Marco is the most overrated lawyer I have ever met.

Anonymous

search their drawers and they have drugs in the boat loads. why havent they been raided in a drug bust yet?

(0)(0)

LEAVE NOW

We need to work with our American friends and take down the undemocratic and brutal EU regime. The EU has crippled Greece, Spain and now Italy. The idea of the EU was based on trading which was fine. But when free movement of people from Romania, Bulgaria and Poland came into effect, the whole idea collapsed and led to the downfall of our great British country. There should be ZERO benefits for Europeans including Romanians and Polish people. I don’t work my ass off so some Polish/Romanian family can come into our country and claim benefits including housing benefit, child benefit, free healthcare and education. Benefits should be abolished for all European immigrants.

We should abolish student finance for EU students. Makes absolute no sense for taxpayers to fund French, German, Spanish and Italian students. I’m not going to include Romanian students as most of them don’t study and are on benefits, causing havoc on our streets.
Fine to charge European immigrants same fees as British students but ridiculous for the taxpayer to fund fees for Europeans.

It’s time for the Queen to step in and arrest all undemocratic traitor remainers including Miller, Grieve, Corbyn, May, Hammond and Swinson. The majority (17.4m) voted to leave regardless of deal or no deal. We must leave on 31 October and not betray the British people.

(59)(89)

Anonymous

Sadly there are a lot of Little Englanders who would not read the above as parody. Basic, mediocre gam mon.

(9)(6)

Anon

Sadly there are a lot of people that genuinely think this way.

(4)(1)

Anonymous

Moron. Back to A-levels.

(0)(2)

Anonymous

Meanwhile Norton Rose Fulbright has yet to announce any pay rises

(9)(1)

Where’s my 100k

surely NRF and Mayer brown will increase in time for September when graduate recruitment begins….

(2)(0)

Anonymous

Keep dreaming, buddeh…! MC, Bakers and HSF are the new master race.

(2)(0)

Anonymous

HL and HSF

(3)(0)

Anonymous

MB already gone up.

(2)(0)

Anonymous

To what??

(1)(0)

Anonymous

Not enough.

Anonymous

£90k NQ

Anonymous

92

Anonymous

But how many hours a day and days a week do they have to work?

(5)(2)

Anonymous

That varies week by week, but a guiding rate would be 1900 billable hrs per year. Your snarky comment adds nothing new and is irrelevant to this conversation

(6)(1)

Anonymous

2, 3, 4 yr senior associates??? Come on. No fee earner is worthy of the phrase ‘senior associate’ until they’re at least 5 yrs PQE. Meaning they’re are nudging 10,000 billable hours of expertise.

If a 3yr PQE is a senior associate then the 3 yr PQE solicitor I instructed at Links was a senior associate even though I (the client) had to explain to her the difference between a warranty and an indemnity.

let me make it easy for you – if you’ve got a copy of LPC guru notes in your desk drawer you’re not an associate…..

(28)(1)

Student

Omds did that really happen? Glad I didn’t apply to Links!

(1)(5)

Anonymous

That’s what happens when you hire GDLs instead of LLBs… plebs…

(19)(16)

Anonymous

Oh, hold up, got something on your shoulder there mate…looks….looks….looks a little bit like a chip? Did the GDL student pip you to the promotion?

(26)(3)

Anonymous

No, they just had a terribly black lettered approach to law. No nuance.

(9)(10)

Anonymous

You kno nothing, anon. Back to your Classics BA notes for September!

Anonymous

Oh, 8.01, keep that sort of banal response for the Daily Mail site. With that sort of limited with, I am sure I could chew you up and spit out your bones like chicken wings, little boy.

Anonymous

In all fairness 20 years ago you could apply for partnership at 5 years pqe at some of the small City shops (<100 lawyers).

It also doesn't help that there's no consistency in lawyer "ranks" across the various firms: I know one regional firm that goes Trainee – Solicitor – Senior Solicitor – Associate – Partner. Many still do Solicitor – Associate – Senior Associate – Partner (Simmons has like 4 levels of Associate too I think?). Others only have Senior Associate as an alternative to partnership whilst other firms call those "Legal Directors". Some firms aren't even that grateful – you could be 3 pqe or 10 but if you're not a partner you're an associate.

It's brutal when you're working on a transatlantic matter and dealing with North American law firms that typically have more common sense and unified structure. I remember one Canadian firm associate dealing with one of the junior lawyers at my firm who is an "assistant solicitor". They wouldn't give our lad the time of day even though they were actually the same PQE give or take a year.

(5)(1)

Anonymous

So many hours for so little pay.

(6)(1)

Kirkland NQ

Actually my dad works at K&E so I’m basically a NQ – I just need to finish my first year resits at Exeter. Daddy got me a day’s work experience when I was at school so I think it’s okay to pretend I have a lambo now cos I’m definitely gonna get one once I’m at the ‘land

(9)(1)

Anonymous

I’m a US firm. Better to train at a MC firm and work in junior ranks. S&M work way less hours than US firms. Billables at MC firms is something like 1600 or 1700. We all do in excess of 2000. If busy 2500.

That might not sound like a lot but every hour over 1500 hurts more and more. Every hour over 1800 and 2000 is excruciating.

Partnership at S&M is all equity and exit options before that time are great. Average US associate only lasts a few years. Corp associates usually end up in-house anyway.

(11)(5)

Anonymous

Billable at mc way higher than 1600, more like 2000

(2)(7)

Anonymous

1700 a year isn’t difficult. 1900 to 2500 involves making lifestyle sacrifices.

Doesn’t include those time dumpers who pad out their time sheets.

(6)(1)

Anonymous

2,500 hours a year is (assuming you actually take annual leave) an average of 55 billable hours per week. If you’re doing that (and surely very few people are on a whole-year basis) then that’s not lifestyle sacrifice, that just is your lifestyle.

(4)(0)

Anonymous

Yup. 2.5k hours a year is fucking savage.

MC trainee

No it’s not, it’s max 1,800.

(0)(0)

MC Associate

Wait ‘til you qualify son.

(0)(0)

Joe

NRF 2pqes up to 83k FYI

(2)(0)

Anonymous

That’s awful Jesus. The fact that NRF can’t match bakers or dla is very interesting

(2)(0)

anonymous

reed smith nq 82.5

(3)(0)

Comments are closed.

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