Swelling junior lawyer salaries ‘only a sticking plaster’, Sir Nigel Knowles warns
DWF chief calls on law firms to find better incentives to retain talent
Big law statesman Sir Nigel Knowles has cautioned against City law firms offering junior lawyers “huge” starter salaries and to instead find better ways of incentivising them or risk losing them to more “enlightened” industries.
In a letter to the Financial Times, DWF‘s chief executive said:
“Offering more and more money to young people is only a sticking plaster. It is not a sincere, sustainable or healthy solution for anyone. Failure to find better ways of incentivising people and building a healthier workplace environment means the British legal industry risks losing talent to more enlightened sectors.”
Continuing in the letter, published this morning, Sir Nigel shared the typical efforts of what he believes to be a more “progressive” firm. “Those tend to have leadership teams that champion diversity and inclusion, encourage a modern work-life balance, and are creating physical environments and culture that are much more meaningful than relying on huge, but ultimately one-dimensional, starter salaries and ad hoc payments,” he said.
“Bright young people have many exciting options these days. They could join a fintech, an ecommerce start-up, ESG consultancy, advertising agency or a charity. The legal industry must wake up to the realities of modern employees, workplaces and society at large.”
Sir Nigel previously served as chairman of DLA Piper, taking it from a small regional outfit in Sheffield to, via a series of bold mergers, one of the world’s biggest law firms. He left the firm after 38 years at the helm, joining DWF as chairman in 2017. Two years on, DWF became the largest law firm to list on the London Stock Exchange, and a year later, Sir Nigel took over as the group’s CEO.
His comments come amid a recent flurry of pay rises from magic circle and other UK law firms who face increasing pressure to keep pace with the mega-paying US ‘MoneyLaw’ firms in London. Goodwin Procter tops the newly qualified (NQ) lawyer pay league, our Firms Most List shows, offering £161,500 upon qualification. Magic circle firms Allen & Overy, Clifford Chance, Linklaters and Slaughter and May, meanwhile, pay NQs recently improved salaries of £107,500.
Sir Nigel isn’t the first legal figure to raise concerns over spiralling junior lawyer salaries. One of the country’s leading in-house lawyers said last month that junior lawyer pay is “out of control” and the profession must find new ways of attracting, retaining and rewarding talent otherwise “people will get hurt”.
Back in 2020 the managing partner of Fieldfisher, Michael Chissick, made headlines after he described how his “heart drops when I see newly qualified lawyers in US firms earning more than some of our partners”. He received support in the form of Pinsent Masons senior partner Richard Foley, who described the skyrocketing rates as “completely unsustainable”.
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57 Comments
UCLad
Let’s make sure the industry sees actual, tangible improvements in culture and WLB before chatting BS like “cautioning against” pay rises and that “overpaid” NQs will “get hurt”.
These are bright trainees that are going in open-eyed to US / MC firms operating top of the market, and if they decide they don’t like it they can always leave for another firm (if indeed there are other firms with better WLB for respectable pay – something which is a bit of a unicorn these days). Fieldfisher or DWF would be seeing massive lateral volume if they are really walking the talk.
These guys love to plaster their bruised egos by acting wise and woke, but in reality if the pay increases end you’re going to end up with no movement on the culture and WLB front and rapidly decreasing per hour, post-tax income for young people who are trying to get on the housing ladder, build savings etc.
Ok boomer
There have been criticisms from multiple legal press on pay increments for associates. I fail to understand why hasn’t anyone bat an eyelid at the fact that partner salary have been increasing steadily for the past 10 years? The pandemic has led to overworked associates and the great resignation… and partners are now whining that they have to share some of the spoils for their associates.
It’s also worth noting that it’s more difficult to win a training contract or make partner these days as compared to the time of these partners.
MC Ass
Completely this. Partners at magic circle firms and below complain that US firms are taking all their associates by paying double, while themselves flying first class to their Southern European villa every weekend, driving Bentleys around and generally being ridiculously rich.
I can see how it’s a real issue for the mid market like DLA where the more junior partners aren’t on big bucks either. But it used to be that at as an associate the rule of thumb was you wanted your salary to be about 1/5 of your billings. These days it’s perfectly normal to bill around ten times your salary or more at a magic circle firm.
Anonymoose MC Mid
Yup. Associates are not overpaid. Partners are overpaid.
@legally_lambo
*lambos
Nah
Lambos are for tacky nouveau riche US firm partners. An Eton educated slaughters partner with a title wouldn’t be caught dead in one.
Cicero
Absolutely and to add to this from another angle, the recent overreaction in the press seems particularly unwarranted when you consider the massive hikes in junior salaries at investment banks. It’s true that rallying against bankers’ bonuses is another favourite pastime of the media, but that criticism also derives from the association of the banks with the financial crisis, not simply that in the eyes of the author it is wrong for juniors to earn X amount of money.
A recent clickbait BBC article, made the utterly misleading claim that recruiters were ‘placing graduate lawyers at top firms on starting salaries as high as £150,000’. Not bothering to even mention that’s an NQ salary which means at the very minimum 2.5 years after graduation (law undergraduate/accelerated LPC/TC).
When you consider, first year analysts at Goldman Sachs in London often come straight out of university and are paid at the age of 21 a salary of £144k ($110k plus £64.5k bonus) it’s really not that ridiculous that lawyers at the top US firms with similarly horrific hours to banking are making the same sort of money in their mid 20s.
Hector
You also don’t see the same overreaction at tech graduates. Google, Meta, Apple, Netflix in particular pay it’s graduate devs and engineers starting salaries upwards of £130k straight out of uni and they also receive shares.
I think because law is fairly transparent with its salaries. For instance firms literally announce their exact NQ salary and display it clearly on websites. Whereas for FANG tech companies, private equity funds, IB – it’s harder to find exact grad pay rates unless you know someone in the sector.
Sorry but no
Tech doesn’t pay that high a starting salary in London, even at FAANG companies and thats including shares which will be on a several year vesting schedule. You’re looking at at least 5 years before you hit that sort of annual income.
Anon
You’ve literally just made that up in your head. A software engineer at Google does not need to wait 5 years to reach six figures whatsoever. They earn that much earlier and also work incredibly light hours (relatively to law). Have two mates in tech and a ex, all on 6 figures out of university.
People really just come on this website and talk crap….I don’t get it
Anon
With record profits last year UK law firms need to follow US firms and learn to share more of the pie
🤔
what do these firms have in common
Fieldfisher
Pinsent Masons
DLA Piper
Judge Dredd
You failed to secure a training contract at any of them?
id rather work at mcdonalds
smh why do DLA Piper bois try to flex on their superiors
yeah
crappy mid-market firms that can’t afford to meet MC levels of pay let alone the Cravath scale?
Anon
MC firms need to raise pay to US levels imo. As US firms continue to expand here, and eventually take on more trainees, all the top students and qualified lawyers will flock to them in search of working the same hours but for double the pay.
When they lose out on the top talent, they will begin to lose out on the top clients and top work too. It will spell the end of the MC.
Itstrue
This is not likely to be the case though is it. Everyone’s talking about NQ salaries only- Freshfields 1 year post qualified lawyers are on 130k plus 15/20 bonus. And a 1 year post qualified lawyer at say White and Case may be on 160?
The pay disparity after tax isn’t as large as you’re making out. Yes US firms on average pay more, but not THAT much more…
An Associate
A senior associate at K&E or Latham can pull in 300k+. NQ pay is massively inflated at MC firms, then your pay rises are fairly terrible until you make partner.
A senior associate at FBD could potentially double or even triple their earnings by going to a US firm.
White and Case’s London office isn’t a proper US firm. It doesn’t pay anywhere the top of the market.
getreal
What are you on about? White and case NQ salary is £147,500
An Associate
NQ salary is a tiny part of the picture. The whole point here is that outside of the “proper” US firms like Latham, Skadden, Kirkland etc, associate pay doesn’t increase that much between NQ and partner. Students look at NQ pay and think it means something, but in reality it often just means that NQs are getting more money at the expense of further pay rises for senior associates.
US SA in London
US SA here. Can confirm I will do around £400k all in this year. Last year was much better, though.
Anonymoose MC Mid
Most MC 1PQE are not on anywhere near 130k.
Anon
Closer to 110
No thanks
Thanks Nigel. Anyway, I’ll still prefer my high salary over biweekly D&I Zoom sessions.
Average Pay War Enjoyer
Statements like this just turn firms into shop windows for recruiters
Aspiring Circus Freak
It isn’t “healthy” to be well-paid apparently.
Well quite. Agreed when working at DWF is like being in a full on collision having broken all of your bones with your organs shutting down. What use is a sticking plaster indeed?
Anon
Just a firm that is feeling the pressure and trying to convince the industry to provide better wider benefits which will cost them less than increasing pay.
Been around a while
What a prat. The reality is if you want a premium, all-hours service, you have to pay for it. It is like the numerous in-house counsel claiming they can demand instant 24/7 service from associates and then whine when those associates are remunerated for providing that level of service. No one is buying the “pay people less, it will improve their welfare” nonsense – this is a cost-cutting drive as inflation increases.
The real story is that partners make extortionate amounts and in-house counsel know it’s easier to go after the juniors (many of whom, unlike most partners, are not from well-off backgrounds and are pursuing one of the few social mobility ladders left in the country). There are also more frank conversations about the very obvious fact that these days hardly anyone is going to make equity and be paid a huge salary at that point.
A US firm or Magic Circle partner will be pulling at least £500k. Why are in-house counsel not complaining about that? Are they hoping for a job in a few years? Who pockets the bulk of their fees?
When I see an in-house counsel behave reasonably in terms of deadlines, then I’ll acknowledge associate salaries should be lowered.
I also have not seen evidence at my firm that fees have gone up to match salaries. Salaries rose due to increased billable hours, not increased prices, and a tight labour market. The partners are sharing more profits with associates to avoid mass attrition.
UCLad
Top comment.
Anon
Dear Sir Nigel,
You are absolutely clueless.
Regards,
The Trainee.
anon
It’s always telling that the firms that complain about this ‘issue’ (was it the Fieldfisher boss last time?) perform relatively poorly in law firm surveys.
I’m assuming many readers/posters here have seen the results of certain surveys which collect the responses of associates at different firms and rank the firms on a number of factors. Weirdly enough, some of these US firms which use salaries as a ‘sticker’ appear to be rather happy shops. Some of them feature in the top 10/5 most years.
As others have said already, the MC and their ilk need to revolutionise their model. Why on earth would anyone work in certain departments of the MC beyond 1PQE? It’s honestly the worst deal in the city.
Anonymous
DW can STFU. Trust me, we all want more money. We don’t care about these other “incentives”.
View from Yankeedom
I’m convinced that expectations matter with regards to satisfaction. For reference, I’m currently paralegalling at an American firm before going onto a TC with a silver circle firm next year. The hours at my current firm are pretty brutal, two of the associates who I work with most pulled in 2,600 hours plus last year. However, in general, they seem like a pretty happy bunch.
One of the reasons for this, aside from the culture being pretty supportive, is that people go into this place with open eyes. Put another way, they know they’re going to get Biglaw fucked and are reconciled with that fact. I think that it may be a different story for other people at less higher paying firms who now find themselves doing levels of work which they didn’t choose.
Anomize
City law firm partners have long made it their mission to overwork junior lawyers whilst push for stagnation in their salaries, so theirs can continue on the increase year-on-year. US law firms understand that a lot is expected from junior lawyers. As a result, they seek to compensate them as a bid to recognise their value.
Anonymous
@Anomize What a cringe comment. It’s not because they intrinsically ‘recognise their value’- as if an NQ is much use at any firm.
It’s simply because of the US education system and differing business models; i.e. most US graduates leave law school with eye watering amounts of debt and thus firms have to pay a certain amount to make it worthwhile (and now the UK offices have matched).
Plus, the US firm often have much smaller teams on average and charge way more than most UK firms (and US clients/the big funds in particular, have the pockets to pay for it).
Show me the money
SQB just raised to £95k. Please disregard the above and let silly season continue 🙂
Out of Touch
I absolutely dare every DWF lawyer to log in no earlier than 9:30 and clock off at 5:30 sharp. Everyday, regardless of partner emails or client demands. Then leave the office with the work phone left in the desk. Let everyone do that every single day without an iota of negative impact on career progression.
If that happens, then this guy has put his nuts (seeing how he’s not putting money) where his mouth is. Only then will they care about appropriately remunerating the staff and caring about their well being at the same time.
The Plaster Speaks
I’d rather get a sticking plaster than no plaster at all my friend…
JAX
I’m not surprised that DWF is speaking out.
We don’t even know what DWF even pay thief trainees and NQs.
Why is he even talking about the salary int the first place of other places when DWF can’t even reveal theirs?
Anon
£47k regional NQ salary.
Anon
What is the London NQ salary? I presume that the secrecy is due to it being embarrassingly low…
Anon
£65k
https://www.thelawyer.com/trainee-newly-qualified-salaries-uk-law-firms/
Another Anon
NQ London salary is dependent on department – £65k or £75k.
There have been pay rises this year (including for those who qualified less than 6 months ago) which was supposed to put everyone at ‘market rate’ but that market rate has just risen again so unfortunately DWF continues to be behind on pay.
anon
Sir Nigel was head of DLA during the 2008/09 crisis. DLA’s strategy back then was to sack large numbers of lawyers at the first sign of trouble. This led to DLA losing massive amounts of talent, who they had to replace 1-2 years later by bringing in new people (or re-hiring the same people) on significantly higher wages. So, yeah, Sir Nigel is not the foremost authority on retaining talent.
Bitter 5 year PQE
Not at all surprised to hear DWF’s reaction – they’re notoriously bad payers. I have no doubt that partners at all mid tier firms have been getting it in the neck from their juniors and have now activated code red after DLA fired their payrise missiles. It does sound rather desperate and a little bit of gas lighting. Law firms that try to pay juniors less because they can will lose talent.
There should be more focus in this debate on what is happening to the 5 year PQEs salaries with all this inflationary salary compression. It can’t be right that a trainee at DLA is getting paid more than a 5 year PQE many top national firms. There is too much disparity.
Anon
Sorry DWFers, seems that Sir Nigel is publicly telling his juniors that regional NQ salaries still being £15k behind Eversheds and £18k behind DLA is not going to be addressed then….! DWF juniors must have recruiters on speed dial!
Agree
Literally the worst advert for DWF
Anonymous
It’s simple supply and demand. Associates are horrendously overworked to the extent that there is a lack of supply. Therefore firms must pay them more to keep them in the job. £150k for an NQ is peanuts when partners at US shops are pulling in £2m+.
Anon
Dwf NQs are on £65.
I have Sources in the market.
DWF NQ
Wrong.
Anon
In insurance it’s £65k. In corporate/real estate it’s in the region of £75k~.
Happy Goodwin associate
Follow Goodwin’s lead – they are not just focusing on pay. There is a £60 a month wellness activity reimbursement, they gave £500 for one night out (all reasonable expenses including childcare reimbursed), free premium health care and dental care, free gym flex membership, a free holiday all expenses paid up to $10k, and next year they are introducing a Pelotan program plus an overseas associates bonding trip on top.
On top of £160k for NQs and £300k for senior associates as a base, plus £120k top end for bonuses (as a minimum for hitting target and plus +75% for distinction rating) (plus $64k COVID special bonus). Other firms need to think about the “extras” to make associates feel loved and increase happiness in downtime.
Alter man
Lol why are people leaving after 3-5 years lol a few that qualified from the KWM trainee cohort have left to be legal counsels in private equity firms, lack of partnership perhaps. Why is that?
DWF NQ in the Regions
Work / life balance is non existent and the pay is poor. This is a PR stunt to aid recruitment (as nobody wants to work here) which has gone very wrong. This is a blatant slap in the face for all juniors at the firm
Kirkland NQ
Hit me up if you want a Kirkland referral. I lateralled as an NQ 18 months ago and given all the pay rises and bonuses I was touching £190k last year.
Anonymous
Do we really have to focus on NQ pay when the highest paid partner in most law firms on average take home **more than 17 times** what newly-qualified lawyers earned? In Fieldfisher the top earner earned 47 times(!!) what NQ lawyers earned. This is based on factual research, not a made up figure – it was published in Legal Week (more well-balanced source). I wonder how much times is Knowles’ take home pay compared to NQs? Is he willing to reduce his pay to balance out the inequality..? I bet the answer is no.
Skint
The lack of UK firms’ PQE-banded pay data beyond NQ level is quite frustrating. Even interviewing at various places won’t get you a clear answer.
It was only a few years ago that it was ‘tradition’ for many firms to publish their banding up to at least 3PQE level.
As someone at a national firm with a historically mediocre NQ salary, there seems to be a ‘flat’ increase per year of between 2.5‰ and 3% which is obviously dire. What are other people seeing?
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