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Magic circle pay war: A&O matches Linklaters with £107.5k NQ lawyer salary

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Trainee pay also up

Allen & Overy has upped the salaries of its newly qualified lawyers to £107,500 as the battle for junior lawyer talent across the City continues.

The move equates to an extra £7,500 or 7.5%, and matches the increase announced last month by magic circle rival Linklaters. The firm’s associates, like their counterparts at Links, are eligible for discretionary bonuses on top of this improved six-figure sum.

A statement from A&O said: “Following a review of the market, we are increasing our London-based lawyers’ salaries to ensure we continue to attract and retain the very best legal talent. The new salaries will be effective from 1 November 2021.”

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The Legal Cheek Firms Most List shows A&O and Links now sit at the top of magic circle pay table, with Clifford Chance, Freshfields and Slaughter and May providing a salary of £100k plus performance related bonus — for now, anyway.

A&O, which offers around 85 training contracts each year, has also increased trainee salaries to £50,000 in year one and £55,000 in year two. These were previously pegged at £47,500 and £53,000, respectively.

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50 Comments

Slaughters partners sweating rn

Darn we might have to dip into the vault again to cover the minion salaries – cancel dinner at Annabel’s

Anon

Annabel’s is far too gauche for a Slaughters partner

Rupert

🐥🐥🐥🐥🐔

Real Questions

Is this via a “sign on” bonus? lol

Answer

Nope, £107.5k base, sign-on and rewarding tangible bonus system. A&O are here to play

Anonymous

Second this. Unlike the earlier raise which specifically said 90k base and a one-off 10k signing bonus, this time it just mentions 107.5k on qualification.

LLnew Nq

Interesting, no sign on at links

CareerLawyer

So does A&O still offer a sign on bonus? How much is the bonus? And is this only for NQs or do 1-3PQE also get the sign on bonus when they join?

Anon

Why haven’t Ropes And Gray raised NQ salaries?

Bob

Who?

Anon

Because that’s a second-rate firm who will freeze at 130k for the next 5 years.

Anon

What are the associate bands like? Have heard firms are just increasing NQ but compressing the scale. These increases aren’t all that impressive if 1PQ and 2pqs are just getting a few grand more.

Anon

At the US firms 3pqe is £200,000

anon

Bit more than that, isn’t it?

Cravath scale for a third year is $240k plus $50k year-end bonus and $20k special/autumn/covid/whatever bonus, so total is $310k or £225k.

Bojo

Yes but not all US firms are on the Cravath scale.

Anon

Common misconception, fresher. The term, “US firm,” doesn’t mean all firms that are headquartered in the US. It only covers the respected US-headquartered. firms in the market which unsurprisingly happens to correspond to those on the Cravath scale. E.g. Jones Day is not a US firm.

Correct Anon

Who decides that though? That is just your definition. You can’t exactly get some authority on the matter (Merriam Webster hardly has a definition of ‘US firm’) so it depends on popular usage. In this case, US firm most definitely can mean any firm from the US.

US Firm = 145k+ at NQ

@Correct Anon

Jones Day trainee spotted.

Recruiter

At US firms 3PQE is £174k base if you assume they use a spot rate. At 90% of US firms in London the FX rate is capped and will be less than £174k. With bonus included the all in figure is just over £200k. Bonus structure in the magic circle (taking the A&O levfin team as an example) dictates that the total all in pay for a 3PQE is between £195k and £205k all in. Believe it or not the gap has been closed and will be interesting to see what impact that has on attrition/ whether the MC can keep it up. To be clear a 3PQE in a support team (eg employment or competition) would not earn that level of comp.

Real Lawyer

The A&O LevFin team are so dire that they’ve broken their typical compensation structure and it is not in line with other departments in the firm. Also, the US bonuses are far greater than a mere 25,000ish figure. If you’re working in K&E LevFin, for example, you’d be getting an average bonus of 50K++

Recruiter

A mere 25,000ish figure is in line with “typical compensation structure” for magic circle firms so I’m not sure I follow the point here?. Where that has been “broken” (not just A&O levfin btw) the total bonus figures are much greater than the average MC bonus and in most cases larger than the PQE equivalent offered by US firms at each level. Also £50k bonuses are very much exceptions to the rule at Kirkland with respect to associate compensation anyway. Happy to discuss if you want to hear more about market rates of course.

Anon

It’s a City wide issue at the minute

Anonymous

£125k at 4 pqe

3PQE

Just got an offer from A&O this morning and 3pqe base is £135k

You do the math…

Nice

A&O doesn’t even reveal pay scales even internally (they only disclose to the relevant band). Nice try.

Facetious

I’m not saying OP was telling the truth, but his chosen name is 3PQE which suggests that he’s claiming to be a 3PQE lateral hire to A&O (and therefore would know that info).

A&O banking

There’s a lot of false information and suppositions on here . A&O does reveal pay bands internally when pay increments are announced and given that I work at A&O, I can categorically tell you that 4PQE makes substantially more than £125k and in fact not a single band on the lockstep is pegged at £125k

3PQE

You are correct Facetious. I would be a lateral hire hence why I know the pay band for 3PQE as it was disclosed to me in the offer.

Fantastic Four: Rise of the Silver Circler

Perhaps this will eventually cause the SC to break 100k base NQ in the next 12 months.

Macfarlanes Partner

I prefer my PEP to be £2m+, thank you very much. Next thing you know, you’ll be asking us to invest in an actual office.

Longfellow Deeds

You realise the PEP figures for A&O, FBD, CC and Links each factor in their less profitable offices as well as London? Average London partner PEP at all four is much higher than at Macs.

Anon

3pqe at MC is £125,000

Anonymous

ROF said 1PQE at Freshies was 130k – no idea on the legitimacy of it though

Bombay Bad Boy

A&O is now £140k at 3pqe.

Anon

So £60,000 difference between US and MC at 3pqe

Anon

Even more when you factor in good standing bonus of at least 20-30k

Why AO

What is A&O’s business model? Their sweaty finance mandates are notoriously exodus-inducing and their corporate work is pure volume (and firmly mid market).

Aspiring Solicitor

Not correct. Just as an example – the biggest LBO of the year was done by A&O’s PE team (Acquisition of Modulaire by Brookfield – look it up).

Why AO

There’s a reason you’re an “Aspiring Solicitor” and not a Solicitor if you can’t distinguish the difference between advising the lenders on an LBO (super sweaty work, that’s why people are leaving) and being the corporate advisors.

Aspiring Solicitor

I may be an aspiring solicitor but at least I can read. A&O actually advised Brookfield on M&A and Brookfield (not the lenders) on debt financing. Try again.

Taking bets

FBD 115k by January 2022?

CMS trainee

How easy is it to move to A&O on qualification? Asking for a friend

anon

Very difficult. They have their own trainee pool that they will want to retain before looking elsewhere. If you want to move to MC it’s going to be at the 2/3 PQE stage when people start moving on

anonymoo

nope, it’s definitely possible – it just depends on whether they need an NQ in a particular practice and that varies each year according to A&O trainee preferences and business need.

Anon

Very true – if you can move laterally earlier it will be to a terrible team like lev fin

Anon

The headline seems a bit misleading/sensationalist.

Hardly a pay war within the Magic Circle. I expect they will almost certainly follow and increase to match each other, since they seem to operate as a cartel on these sorts of things and do not want to loose face.

In terms of the war, the top tier US firms have already won that. They already pay significantly more and this increase in no way closes the gap.

At best, puts these firms a little ahead of the silver circle firms.

NRF where you at??

Starting to get awkward now…

Not Really Fair

At bronze circle now

Anon

NRF nqs still on 85k base..

Anon

And CC have upped their NQ rate in Germany to £118k equiv.
With the next pay review in London before the end of the financial year, there’s a strong possibility of it being matched.

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