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Freshfields matches Clifford Chance on trainee pay

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£50k in year one and £55k in year two

Freshfields has matched trainee salary increases announced earlier this week by its rival Clifford Chance.

The Anglo-German giant confirmed trainee pay in year one now sits at £50,000, up 11% from £45,000, while rates for year two rookies come in at £55,000, up 10% from £50,000. The increases are effective from 1 October 2021.

The money move matches rates confirmed on Wednesday by Clifford Chance and those already in place at Linklaters. As for the rest of the magic circle, Allen & Overy provides rookies a salary of £47,500 in year one, rising to £53,000 in year two, while Slaughter and May dishes out £47,000 and £52,500.

The Legal Cheek Firms Most List shows US titan Davis Polk is home to the highest paid trainees in the City, with a year one salary of £57,500, increasing to £62,500 in year two.

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19 Comments

Freshfields chance

Told you

Question

How long does FF get back to candidates after doing direct TC AC?

FF

Could be the same day or up to a few weeks

Future FBD trainee

I found out two weeks later!

Sbb

Will FF NQ reach 130k or nah?

Joe

All it takes is one firm (non US firms that is) to make the move and the rest follow.

Otherwise they will squander just around the 6 figure mark for the next few years…

Students need to be skeptic of grad recs

It’ll probably be incremental. One will go to 105k, the others will follow, then 110k etc…

non

I don’t think we will see a stampede of non-US firms following their counterparts from across the pond in this regard.

Freshfields has just retained 34 NQs, let’s say they will have 60 NQs for this year. Even a 5k increase in salary will cost the firm hundreds of thousands of pounds, let alone increasing by 30k. Then you have to factor in salary increases for the more senior individuals to avoid terrible bunching, this is all money that detracts from profitability for partners.

Don’t forget that as much as Legal Cheek is full of students trying to get a TC, these law firms are competing for talent at the Partner and Senior Associate levels. You’ve just given 60NQs a 30k pay rise, now you have to attract top talent in highly profitable fields who expect exceptional pay.

What I think is more likely, which we are seeing already in most City firms, is that bonuses will be used to reward those in highly profitable teams who are expected to work the worst hours and are in direct competition with US firms. This is why headlines about remuneration have been dominated of late by statements such as ‘NQs can make up to…’. It will allow the exceptionally hard working NQ in the Travers Smith Private Equity team to be rewarded for his or her hard work with a 117k pay packet while the NQ in Tax or Pensions gets paid circa 95k (90 base plus a bonus). Similarly at Partner level, I think The Lawyer recently reported that Freshfields is modifying partner remuneration to pump up the pay for their money makers in private equity, leveraged finance, etc.

For associates, the possibility of a big bonus combined with slightly better hours and perhaps better career progression long-term (strong client base, more room for senior associates and partners) will be used to keep good talent around. Additionally, those guys and gals in support teams are better paid for their work than the majority of the legal profession, except for the two-dozen tax associates in London who work for US firms.

This isn’t a novel idea, it’s been said before. I just wanted to point out that the idea of further salary hikes across the City outside these hugely profitable practice areas isn’t likely. Even if Freshfields goes to 130 for all NQs (even the Digital or Environmental team?) all of the City won’t follow. It’s a different business model and to match it the Magic Circle would have to lose their point of difference, which is that they offer corporates a full service rather than just doing Corporate, Finance and high value disputes. They would have to lean out and focus only on the most highly profitable practice areas.

This isn’t a bad state of affairs, there is more to law than huge money in a small number of practice areas. If you enjoy Data Protection and are lucky enough to work in the Magic Circle, or most other reputable London firms for that matter, you can make a very good living doing something that entertains you. Many support/advisory teams, although not as highly profitable, are a valuable source of cashflow to these firms and provide services which clients need (otherwise they wouldn’t be doing it).

I have spent far too long on this comment, but there we go.

dumb_op

why isnt this thread getting as many comments as the CC thread. currently 5 comments here vs 50 on the other one.

Dan

I wonder if we’ll start to see US firms pushing their trainee pay up.

GP KONG

Goodwin – where’s your raise at??

Ok

Cool beans. In other news, I just bought a giant Lego set!

NQ

Anyone heard of Brown Rudnick and got any sensible views?

Plop

I just squeezed out a Brown Rudnick sitting on the office traps. Can confirm it was excellent.

Amofo

In other news MoFo is giving to the Cravath scale from 1 Oct. you heard it here first bruv

Back to school son

Aoooooooooga, fresher alert, fresher alert 🤡

US firm associate

Its actually true.

Anon

US firms have to raise trainee pay now

Fbdfan

Trainees are now happy. Except NQs who receive no bonus. Many people are leaving to US firms, obviously only relevant for corp/fin departments but that’s the profit centre of the firm.

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