Macfarlanes to cut NQ pay by £5,000 as it reveals 88% autumn retention score
Silver circle player’s partner profits up 10% to £1.91 million
Macfarlanes is set reduce the salaries of its newly qualified (NQ) lawyers by £5,000 as it confirmed 22 of its 25 final-seat trainees have accepted permanent roles at the firm.
The silver circle player confirmed new associates will receive a “provisional” base salary of £80,000, a cut of £5,000 (or 6%) from £85,000, pending a salary review to be conducted this autumn. Individual and firm-wide bonuses will be paid out as usual.
Separately, Macfarlanes announced an autumn retention score of 88% (22 out of 25). None are being retained on fixed-term contracts.
“We have not changed our policy due to the coronavirus situation and we are pleased to have been able to maintain our consistently high retention rates for our trainees qualifying this September,” Seán Lavin, head of graduate recruitment at Macfarlanes, commented. “We see our trainees as the next generation of partners and we recruit, train and retain them with an eye to the firm’s long-term future.”
Legal Cheek reported in June that the single-office-outfit will now be offering 33 TC spots a year, up from a previous figure of 31, in response to the growth of the firm.
News of the salary cut and latest retention result coincides with the release of the firm’s 2019-20 financial results. It recorded a 10% uplift in its profit per equity partner (PEP) figure to £1.91 million, while turnover rose 9.5% to £237.7 million. Operating profit grew 13.8% to £126 million.
In a statement the firm said:
“This was a team result and we would like to thank our excellent people for being so adaptable throughout the year, but particularly at the back end, during COVID. Their hard work produced a good outcome overall. We are predicting a tricky year ahead but we face the future alongside our clients with confidence.”
Last month fellow silver circle member Ashurst revealed PEP had fallen 7% to £903,000 following what the firm described as a “year of consolidation”, while Herbert Smith Freehills reported last week that partner profits had tumbled by almost 10% to £857,000. Travers Smith, meanwhile, recorded a 20% drop in PEP to “approximately £1 million” for the year ending 30 June 2020.
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