Salary bunching: the unspoken effect of the City talent war

As ‘flashy’ NQ rates continue to soar, a recent Legal Cheek open thread exposed the ‘abysmal’ associate salary bands in place at some UK law firms

The recent spate of newly qualified (NQ) solicitor pay rises has given rise to so-called “salary bunching” at some UK law firms, whereby the difference in remuneration is rather negligible further up the associate ranks.

This was the key takeaway from an open thread we shared last month in an attempt to shed light on lawyer salaries beyond trainee and NQ level.

Sourcing this information is not easy (we’ve tried) and quickly goes out of date, so we passed the baton to our readers, many of whom work for UK law firms, to share their insider knowledge.

One UK-headquartered firm is said to be paying £95,000 at NQ level, £96,000 at 1PQE (post-qualified experience), £98,000 at 2PQE and £101,000 at 3PQE. “That bunching is abysmal”, wrote one anonymous commenter, with another saying it was the reason why they made a lateral move to a US firm, where the financial rewards are significantly higher and the hours, more or less the same.

“It’s so obviously all about the flashy NQ salaries to get people in the door,” said one Legal Cheek reader. “After that, who cares?”

Our readers do, clearly. The thread drew in over 250 comments and counting, and makes for insightful reading.

The pay structure at another UK firm is supposedly a little more generous and recorded in the thread as follows: £95,000 at NQ, £97,500 at 1PQE, £100,000 at 2PQE and circa £105,000 at 3PQE. At another firm paying out the same £95,000 NQ figure, they are said to be even higher: £98,000 at 1PQE, £101,000 at 2PQE and £106,000 at 3PQE. Having information as such could help training contract offer holders in their decision-making.

Our commenters have provided the lowdown on several other firms, including the magic and silver circle and those in the regions, but note that these figures are as of yet unverified.

Other interesting things the open thread highlighted:

• Associate pay can vary according to practice area, with those in busy transactional teams such as corporate or finance widely accepted to be at the higher end of salary bands but also, target hours.

• The salaries at some firms can be fixed for associates of about one to three years PQE, after which there’s banding and pay is determined based on performance, but this is by no means a hard and fast rule.

• Lateral hires being paid lower than home-grown talent and in one instance, a 3PQE lateral paid the same as a 1PQE associate.

• The varying bonus schemes in place at UK firms.

So where do we go from here? Perhaps we’ll see a UK law firm go on the record with a full breakdown of what they pay associates from NQ to at least 3PQE, leading the way for other firms to disclose their figures. But don’t hold your breath.