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New era of home-working could spell the end for sky-high City lawyer salaries, Big Four legal boss warns

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PwC partner Ed Stacey reckons it’s getting harder to justify regional pay differences

If everyone in a firm is mostly lawyering from their living room, what’s the point of paying people massive salaries to live in London?

That’s the question being asked by Ed Stacey, head of legal at PwC.

In an interview with Legal Week (£), Stacey says that it’s “quite difficult” to justify huge salary differences for solicitors at different branches of the same firm if everyone is working from home anyway.

Stacey, a partner at the legal arm of the accounting and consultancy juggernaut, reckons that solicitors working outside of the City of London could start to question their often much lighter pay packets.

Law firm salaries are available on Legal Cheek’s Firms Most List — but the headline ranking is by London wages. Click through to a given firm’s profile, and you’ll often see a lower regional rate in the fine print.

The 2021 Legal Cheek Firms Most List

Stacey told the website: “Some of the London salaries have got pretty rich compared to some of the regional salaries, and I think when people realise that the job can be as effectively done from home, it’s quite difficult to begin to justify that huge gap in salaries.”

He added that wage differences between London and other big cities like Manchester would come in for particular scrutiny if lawyers in and around the capital aren’t having to pay for their commute.

Many City firms have already moved to trim London salaries for their newly qualified lawyers, although others have bucked the trend. Earlier this week, US giant White & Case gave NQs a £25,000 pay rise, taking them to £130,000.

House prices in London are twice the UK average and general consumer prices are 7% higher in the capital, according to the Office for National Statistics.

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45 Comments

Regional lawyer

Spot on

Allen in your Overys

City lawyers bring in city clients and work city hours. You want more cash, bring in more revenue.

Few too many regional lawyers getting a bit big for their boots on this article.

(117)(10)

Person

City lawyers (working from home) deserve more because they’re the only ones that bring in city clients (also working from home). It’s a bit hard to square that circle.

I doubt the firms are charging less by the hour for the regional lawyers to do the work as opposed to the London lawyers. If anything the regional lawyers should be bringing in more profit for the firm as they’re cheaper to pay, even if they work less hours.

Anon

In firms I’ve worked for (Mid tier, normally with a handful of international offices and a few regional offices but with the bulk of the form being London based) regional lawyers are charged out at lower rates, largely because the work they are being used for doesn’t command the higher city rates. The question for me is will WFH change the way firms allocate work around the regions, if yes then that should result in increases in regional salaries, if not then nothing is likely to change.

WY

Beware of the Kirkland & Ellis London Office: they are stealth laying off people.

future lawyer

can you expand on this?!?

Bob

Bollocks, given the profits big firms make. The problem is regional lawyers being underpaid, not City lawyers being overpaid.

Daily Fail

£140k at NQ….

Bob

I billed over a million quid last year and earned around 13% of that.

Anonymous

Costs are running at 75%, so you are seeing most of the income, particularly once one takes into account pension payments, NI contributions, health cover and other benefits.

Realist

Costs are nowhere near 75% in US firms. This is the main reason why English firms are falling behind, and why US salaries are so much higher.

Anonymous

But, still, it’s a bit too new money to work for one of them.

City boy

No one made you join some poxy regional shop paying you peanuts mate. Get that chip off your shoulder and move to the big boy firms in London if you want more wadd.

Kirkland NQ

Exactly. If you can’t even afford a second hand Ferrari on your basic, or have enough of a bonus to splurge even on non vintage Krug, are you really a lawyer?

B.J. Cochran

Why is a BIg 4 talking talking about law firms ? How dare they. Stay in you working class league dear sir and leaving the real professionals alone to determine their own future.

Person

The same big 4 outpacing every English law firm in the city by virtually every metric?

Anon

Shows a disregard for the business differences that underlie the geographic differences.

City NQ

Yeah, and so we should, because the regional lawyers can buy a 4 bed for the same amount as the deposit on my studio one bed in the city.
They can wfh from several rooms, I have to use the same overused sweaty box as every other day. I take one step I’m in my kitchen. I can reach the toilet from my bed.

Cockpit

That’s clearly beneficial though, as you can take your morning deuce while fixing up some scrambled eggs all the while still keeping your feet snug under the covers in your bed. Winning at life right there.

anon

This is excellent. Just the image of someone doing all three things at once cracks me up lmao

Impartial advisor

If you don’t like it you could always move to the regions, buy that 4 bed house and WFH (or go to the office a couple of times a week) as well?

SC

If I was at PwC I would spend less time talking about the value law firms provide and more addressing the accounting industry’s issues. The Big Four are repeated pulled up for systemic audit failures and their consultancy fees through insolvency proceedings and government projects are a rip off.

City trainee

If I was at PwC I’d re-evaluate my life choices.

AA

The way the market is at the moment you could very well end up there. So don’t dismiss them just yet Sunny Jim.

Tips@legalcheek.com

Maybe if the Big 4 adequately remunerated their employees they would be motivated to actually do their jobs and we would see less systemic audit failures. The firms wouldn’t then have to pay out massive fines. It’s almost like it would pay for itself.

Curious Clive

What sort of whack are the gimps at the Big 4 on, three or four years in? Does it compare to the current median NQ wadd at a City firm?

SC

No, Big 4 in accountancy/consulting doesn’t offer huge salaries to juniors. The pull is still massive though because in that world they are premium additions to a CV and good points to network.

Consultant

They’re not even though, are they. Would much rather work for McKinsey.

Sex and Violins

I would expect something like £50-65k in London for a qualified accountant/experienced consultant after say three years (maybe more maybe less). However its a very different model to law firms. The junior staff do more of the work than a law firm, and they tend to have better exit options than a law firm frankly speaking. Lots will go into in house roles on the finance, strategy and corporate development side that are generally more interesting and better renumerated than either Big 4 roles or an in house legal position.

Phil

PWC really didn’t operate in the same market as US/MC/SC paying big bucks so don’t think his opinion is of any value.

Phil

*don’t

anon

lol as if the salary differential was previously driven by the commuting costs

Skadden boi

lol mediocre people get mediocre salaries

it’s the market’s way of saying that you’re not good enough to command the big bucks

Anon

Erm “WFH” in most cases for London lawyers means working ~in London~. Our working hours and heightened living expenses haven’t changed other than not spending £7 on the tube anymore. Stay in your lane bro

Anonymous

The tube? Either walk in or cab it.

Q

Apparently some of these people live in zone 5. I did not even know there was a zone 5. Sounds like something from Mad Max.

Ed

No guesses as to which firm will be the first to slash NQ pay when the opportunity arises…

SM

Several already have. Slaughters certainly has, by £5k.

Regional lawyer

Depends on business model… salary disparity is justifiable where regional lawyers doing ‘grunt’ work and London lawyers the ‘city’ work. But for those firms that genuinely work cross-office (with same targets and hours etc), how can it be justified that senior regional lawyers are paid less than the junior london lawyers they are supervising.

Future London vac schemer

No way will I accept the same pay as somebody from some office in Manchester or Bristol LOL

CClifer

Your a Vac Schemer you’ll get what you’re given jnr

God's Wrath

working at PwC suggests a moral failure (laziness; lack of ambition; lack of grit; mediocrity; lack of pride in one’s word)

you’re being punished for that moral failure by being given a low salary

it’s just the way morality works

Forever Associate

Whenever these articles come out, two things ring true:

1) Regional barristers and solicitors are often underpaid for what they do, but there will always be an income split between regions and London.

2) Every person (well, not really a person, lawyer) that states top-quality legal work is going to leave London for any reason (regional offices, WFH, etc) has likely had their advice notes thrown in the bin by clients, as they CLEARLY do not contemplate the bigger picture.

Top-tier law did not create London. It just happened to arise in London because London is, by every possible historical, subjective and empirical margin, the most important city in the UK. This has nothing to do with bashing others’ hometown pride or unwavering loyalty to local farmers markets… the world loves London. The theatres, the tourist attractions, the traditions, the crazy house prices and the endless retail/leisure/hospitality offerings. I know US industrial company execs that put London seat arbitration clauses in their domestic contracts so they have an excuse to bring the family to Covent Garden when things kick off. The global love affair with London is never going to change and therefore the best possible international legal work is always going to find its way into the capital region.

Great work from domestic and international clients can and does make its way to great firms outside of London (think Brabners, Burges Salmon, Walker Morris), but those with a local London postcode will be first in line at capturing top-tier work and can charge crazy rates. Those lawyers associated with the London office and practice groups will inevitably demand higher compensation than those associated with the regional offices that do not have the same access to direct top-tier instructions. It doesn’t matter if those lawyers are at their office desk or in the home study, what matters is the address on their business card and the type of work they’re likely to get at that address.

LoreMan

Neatly put, squire.

CClifer

Absolute BS- if anything salaries should be going up! Less office space required = less cost on rent = more money.

The evidence is out there to prove working from home increases productivity: so I become more productive but get paid less for doing so. Say hello to my middle finger

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