City pay war: Macfarlanes boosts NQ rates to £107.5k
Also confirms autumn retention score of 92%
City law firm Macfarlanes has increased the salaries of its newly qualified (NQ) associates by 7.5%, Legal Cheek can reveal.
The firm’s most junior lawyers will now earn a base rate £107,500, up from a previous figure of £100,000. The cash injection sees Macs’ NQs draw level with their counterparts at the likes of Allen & Overy, Hogan Lovells, Linklaters and Reed Smith.
The silver circle player said firmwide bonuses, which are uncapped and awarded to all staff, will be paid this year at 11.2%.
At the same time, Macs confirmed an autumn 2022 retention score of 92%, with 23 of its 25 final seat trainees committing their futures to the firm.
Jat Bains, graduate recruitment partner, said: “Our trainees are our partners of the future and we are delighted that so many are continuing to build their careers with us.”
The Legal Cheek Firms Most List 2022 shows trainee pay currently sits at £50,000 in year one, rising to £55,000 in year two.
And NQ pay isn’t the only thing on the up. Macs has reported a 16% increase in turnover to £303.7 million while operating profit climbed to £164.2 million — a 15% uptick on the previous year. Profit per equity partner (PEP) jumped 19% to £2.48 million.
Commenting on the results, senior partner Sebastian Prichard Jones said:
“I would like to pay tribute to both our fee-earning and business services teams for their dedication in a period in which there was a high demand for legal services during often difficult circumstances as the pandemic unwound. These results are a reflection of everyone’s collective hard work and commitment to our clients. By comparison, the outlook for the year ahead seems more challenging and we are already starting to see much more caution in the market.”
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92 Comments
Pay War 3: Revenge of the Silver Circle
It’s back!
CHEAP
Wow, this is CHEAP from Macfarlanes…
Imagine having such low overheads, MEGA PEP, few trainees and not even matching HSF.
BIG own goal which will likely lead to quite a few resignations.
Misery Guts
Mega PEP won’t sustain itself next year, and firms that aggressively raised salaries (FF, CC, HSF) will likely lower them in the next couple of years in response to any significant market downturn. “Cheap” firms like Macs and A&O have lost the PR/graduate recruitment war, but may be smirking to themselves if the big spenders decide to lower their salaries.
– a future CC/FF trainee who probably won’t see a £125k NQ salary
Anonymous
lol, clearly you didn’t get the email from FF grad rec to all future joiners today then.
Anonymous
Please divulge
1 x Future Joiner
Nothing in my inbox? Was this email specific to certain intakes? 🙁
Future trainee FBD
Your pants are on fire.
Knowledgeable Chap
Except Macfarlanes isn’t the same as those firms though is it? Big Private Client roster whose spending is unlikely to go down much.
You think all the global turmoil and sanctions isn’t partly responsible for their huge PEP increase? The chaos is only going to continue, and rich people will do anything to preserve their wealth.
Dudley
wtaf is a “future CC/FF trainee”
Anonymous
Future Clifford Chance/Freshfields trainee
Anon
Utter rubbish, law firms don’t keep any cash in the business whatever they don’t spend on salary gets paid out to the partners in equity. Therefore, if there is a recession Links/A&O will be cutting salaries and jobs just as much as FF/CC. They are not holding the savings they make now in a special associate job saving account.
Wtf?
“ law firms don’t keep any cash in the business”
This has to be a wind up 😂😂😂😂
Anon
From the FT during Covid:
“Although it has no long-term debt, A&O, like most law firms, runs with low cash reserves creating a rapidly worsening financial situation if clients pay late and work dries up.
Mr Ballheimer had intended to ask his 550 partners to stump up more capital during the summer for the first time in 11 years after its cash position had grown too thin”.
Educate yourself in future please
Anon's SE Teacher
Bro you a straight up clown. Imagine even thinking about a career in corporate law and thinking this🤣🤣🤣
Anon
From the FT during Covid:
“Although it has no long-term debt, A&O, like most law firms, runs with low cash reserves creating a rapidly worsening financial situation if clients pay late and work dries up.
Mr Ballheimer had intended to ask his 550 partners to stump up more capital during the summer for the first time in 11 years after its cash position had grown too thin”.
Educate yourself in future please
Anon
There’s only one piece of utter rubbish here…
Anon
Yes you, law firms have next to no cash reserves relative to outgoings. They pay out profits directly to partners every quarter. That’s why within just one month of covid hitting all the big firms were having to beg partners to re inject cash into the business to keep it afloat in the form of capital calls.
Anon
No cash and low cash are very different things – the latter of course being subjective.
CC just announced a net cash position close to £400 million.
Anon
They are not very different things. Obviously it doesn’t have £0 to its name, we are talking in relative terms – not even enough cash to sustain itself for more than a month if all the work dries up and clients don’t pay. Law firms are more at risk of cash flow insolvency than almost any other business. You think a few hundred million in reserve is enough to pay for all the salaries, office leases, equipment, bills and enough to keep the partners happy if payments in dry up? That’s why associates will still get the chop whether they are at CC or A&O – may as well be paid more in the meantime
Anon
The responses to this comment have been an excellent case study in separating the freshers from those who actually know about commercial law. Anyone with industry knowledge would know law firms don’t keep much in cash reserve unlike banks (with their regulatory capital requirements) and other businesses. Doesn’t take an insolvency lawyer to work out what can go wrong very quickly when clients stop paying. Some folks clearly need to brush up on commercial awareness in the meantime!
Person
A
Anon
People need to get over this idea that every decision on pay triggers mass resignations – it just doesn’t happen.
Git gud scrub
Overall I agree with you, but I do think a firm’s more general movements on pay definitely affects how willing associates would be to get friendly with recruiters and snatch up a good role as it comes along.
Some SC / Global firms (cough cough, NRF) have definitely seen a steady trickle of resignations during the past year or so at all associate levels but also at the NQ level (note conspicuously missing retention rates for said firms, with NRF again being a good example). This is for a plurality of reasons, but pay that doesn’t keep up with the market and awful bunching at PQE is 100% a key factor.
Meanwhile in reality
Yeah, except it wont lead to that.
Anon
This is getting ridiculous now. A UK firm paying NQs £107k + is not cheap. Get a grip. Pay also has nothing to do with the quality of work either – views on salary and firms are becoming so warped based on the opinions of students with no real life experience.
Stupid Boy
Travers what you got? Don’t tell me…”a great culture” and vouchers for the Bishops Finger pub where you can enjoy a mediocre pint in the company of colleagues to discuss the work you could have been discussing at the office 5 metres away? Who needs a pay rise when you e you’ve got that….throw in some vouchers for the karaoke bar next door where you can discuss work which you could have discussed in the office 2 metres away and you’re made! It’s what dreams are made of – I’d take a pay cut for these perks….
Insider
As a trainee at travers I can corroborate this sentiment 100% – the only thing I’d add is that we will probably also get more free chocolates in the kitchen – who knows maybe they’ll even branch out to free cadburys products……the classic club bar diet gets a bit monotonous – mgl – give me some Dairy Milk and Twirls Travers!
Non city lawyer
lol funny but true.. from what I know but I’ve never worked there is that basically nobody at Travers has friends who are not at Travers. Quite nice if you think about it but also bit of a nauseous coftail of mixing personal and business too much!
Travers Truth Talker
Completely untrue . Speaking as someone who works here and someone whose best man, stag party (all but one) and past two girlfriends (including my now wife) don’t currently work at Travers. Met each and every one of them on the travers TC so the above simply is not true…
Mr Inference
Cute….you’ve just inadvertently confirmed the point by suggesting that all your friends and personal relationships consists of former travers trainees….
Anonymous
Rumour is they’re going to scrap chocolate in the kitchens, go and get your vegan oat biscuits from the canteen.
Fall of the "Magic Circle"
The recent pay war will be marked as the beginning of the fall of the MC. ARISE SILVER CIRCLE COMRADES.
Head in Ass
Clients aren’t going to change their go-to firms based on junior lawyer salaries.
It's a longer vision
salary war = talent follow money (don’t dispute me on this, I’d estimate that it is 95% accurate) = lesser quality lawyers at traditional MC shops who don’t want to keep on the junior end = increasingly bad work product = in the next 5-8 years there could very well be a pretty big shift away from the traditional shops.
Bro
I’m not sure where you’ve got the idea that SC lawyers are of a lesser quality. It’s not like SC lawyers are (x)% worse than Clifford Chance lawyers based on the overall difference in salary. Your post reads like a 1st year Law student’s pompous thoughts on the legal market after stumbling upon news about salaries.
Who’s next
WHOS NEXT TO RISE?!!
Anonymous
Hopefully Bakers again, previous rise was pathetic
K Marx
The proletariat.
Silver Jirkle
Can actually see Ashurst either matching HSF or going to say 110k (ala Bakers).
Travers on the other hand… They might be willing to increase their biscuit offering?
Ashbursts
Ashurst for the past 5 years has also been lower than Travers and Macs in salary even if just by a grand. I wouldn’t expect much from them.
Ashurst out of all the silver circle will also be the most concerned by the recession. They have still failed to diversify their practice areas since the last bloody recession . They rely heavily on finance it brings in over 60% of their top line, and finance is slowing right down throughout the city.
Ashurst NQ
Sigh, another fresher who isn’t actually following the market.
Clearly haven’t seen the firm’s activity as of late have you? Best ever PEP (near £1.2m), US expansion underway, 12% revenue growth, and a massive increase in its consultancy offering profits.
Assbursts
Hun 12% revenue growth places Ashbursts as the lowest growing SC firm (pending Travers results). So whoopidoo
Ashurst future trainee
And the firm is extremely busy in almost every practice area according to a couple of trainees I’ve spoken to
Law student
Are Ashurst going to increase NQ pay or match HSF?
Ashurst NQ
@Assbursts, the amount of poop that gets cited on here is actually laughable. HSF’s revenue was only up 6% this year. PEP is also an important indicator of health, and Ashurst’s PEP grew 13% this year…
One rudimentary Google search tells me that HSF’s PEP grew 6% (check Legal Business’ article). Not bashing HSF in particular, but please stop talking complete tripe without knowing the facts, it’s utter cringe and won’t get you far as a lawyer.
As - we excel in mid market finance and nothing else - hurst
Ah so 2nd lowest then. Amaze.
You’re hurt because you trained at a crap firm. Don’t cry at me.
Anon
Stingy, stingy, stingy.
PEP at 2m+ and a small trainee intake, combined with a chance to re-wire the legal landscape by leapfrogging Links/A&O, and they come with this?
Expected better.
Has BF at Macs
It’s not just near £3m PEP they have but they also have the highest cash reserves of any UK firm (well assuming Slaughters isn’t higher which of course no one knows). So £107.5k is very poor.
They may have good retention rates but most of those NQs are already making plans to leave, plus their corporate and tax department is being eaten alive by US firms poaching. And they aren’t attracting enough TC offer holders to choose them as a first choice firm so are having to constantly dip in their paralegal reserves and make them up as trainees (spoiler alert people who have had to paralegal for years aren’t exactly top crop).
Raise your bloody salaries and starting not only attracting but retaining top talent again Macs
Anonymous
Agreed. Grad rec and the firm act like they’re super elite and then do things like that…
Thing is, Macs could genuinely present itself as the hottest ticket in town if they bumped up their bloody salaries. Imagine an alternate reality- silver circle hours, 135k/40 NQ, and hot partnership prospects.
Current reality: the Partners are tighter than a ducks ***.
H
What do you mean aren’t exactly top crop. If you have good paralegal experience, then that’ll obviously put you leaps ahead trainees who have no concrete experience and even allow you to qualify earlier form such experience…
Associate
I think what this person means is that if you are sitting in a paralegal position for 3 years, you’ve probably been applying throughout those years and not secured a TC.
In reality little to none of City trainees with significant paralegal experience qualify early.
Firms will want the full trainee rotation across the two years to get to know the different areas of the business, develop their skills (that they absolutely do not get at paralegal level) and keep them on trainee salaries.
Trainees will also want that skill development and the full two years of having the trainee safety net in place.
Its only the City paralegals who dont have / havent started their training contract that think they will qualify earlier.
Reply
Well that’s your opinion but I know a few paralegals that have qualified early due to such experience, it’s not a blanket rule. Depends on the experience the paralegal had and the firm they had the experience at…
HH
Paralegals who have failed to get a TC or vac scheme throughout university and then failed to do so again for 2-4 years after uni are not top crop.
These are not the candidates elite firms are competing for. And for Macs to be filling up their TC spots with these candidates that no other firm wants is not a good sign. Firms want the most sought after students and graduates and having to settle for paralegals consistently does not scream “we are a competitive firm who attracts the best talent”
Sorry
HH, I’m sorry but you’re stupid.
Bored
@sorry and you’re a paralegal
Uni First Year
“The silver circle player said firmwide bonuses, which are uncapped and awarded to all staff”
Does this apply to trainees too? Like do they get £50k+11.2% or it NQs upwards who are eligible?
Lol
Lol fresher 👶
Anon
Trainees who started in September do get a bonus
Anon
£2.5m for a any UK firm is absolutely insane.
Similar firms to Macs like Travers are no where near that.
Surprising that they couldn’t raise salaries higher. Either they know something about the market that we don’t or they are being cheapos
Anon
Latham NQ now 164k
Thanks
Thanks mate good to know, trying to decide between weil and Latham
Anon
My condolences.
Inquisitive Weil + L&W VS
What do you think you’ll choose? What’s up with people disliking Weil?!
Dunno
Not sure what the hate with Weil is tbh?
Any insiders care to share?
Disgruntled MC associate
LL and A&O are a joke.
Anonymous
DONT WORRY- YOU STILL HAVE THAT ‘PRESTIGE’. Whatever that means these days…
Just ate my shoes and only have belt left before dying of hunger
What’s Simmons saying? Any insiders got info?
V
Simmons on 100k and they’re not even silver circle be happy with that 🤣
You can eat nice food
Too many freshers obsessed with these circles and roundabouts moniker.
From what I know, Simmons pay the same as the top London firms at trainee level (50,55) and more than some of the so called silver circle at NQ level. It’s not the cliques that the media has given the firm that matters, it’s the work and the people. Enjoy your 100k and stop moaning.
Q
105
B
Any news on Norton or pinset to increase to 100k?
Barney the tree
Norton might.
Pinsents dragged their feet for a year before increasing so I very much doubt it.
Norton Antivirus
If Norton does increase it won’t be by much and it won’t be until after they’ve sorted out their much bigger bunching problem.
Fresh NQs poached by US firms is ultimately a long term problem, whereas senior fee earners walking out the door in droves because they get paid tops 20K more than NQs is very much a ‘solve this now or we sink’ kind of problem.
Hv
Bakers literally just increased recently, reckon it might be the shed or piper
Worth moving to a mid range US firm?
Is it a going to be detrimental to the career to go from MC to a firm like Paul Hastings? Or not really?
Dd
What a silly question
Josef
no – get rich.
Lol
Paul Hastings will not make you rich.
Insider
PH pays cravath salary and the firm is expanding rapidly. Teams too lean and 99% of the associates are terribly burnt out. Go to Goodwin or Sidley to do less hours but for more £.
??
You are all really boring
Jamie
The magic circle is a myth.
Come on people
This jaw-dropping at the Macs PEP is misplaced and it happens every article involving Macs.
There is a reason A&O, CC, FF and Links PEP is lower… they have offices in the likes of Warsaw, Jo’berg, Perth and other strategic locations where their ability to charge high fees is limited. Their London-only PEP is significantly higher than their global PEP. And that is the measure which allows apples v apples comparisons between the MC firms and Macs. A big ticket A&O or CC London-based partner would bring in, and be paid, a bucket-load…and I suspect as much, if not more than, a big-wig Macs partner.
Anon
The highest paid macs partner (£6m) is more than any MC partner. Macs has higher PEP because they are more profitable – HOW they have more profits isnt something to be bitter about.
LC freshers: “But but Clifford chance would have more profits if they had less offices!!” – ok and? They don’t have less offices do they . Why are you upset about how the basic concept of profit works. That’s like me saying I would have more money in my account if I earned more money and spent less – ok AND..
Sigh
*Fewer* offices. Sigh.
Macs has a non discretionary bonus of 10% apparently
Yes, but lifted from the salary bunching thread:
“Macfarlanes:
– NQ: 100 k
– 1PQE: 102.5-110 k
– 2PQE: 105-125 k
– 3PQE: 110-135k
– 4PQE: 115-145 k
– 5PQE: 120k+
These are all plus a firm bonus (everyone gets) of around 10%, plus an individual bonus of 10-35%”
Therefore base of 107.5 + 10% “firm bonus” which “everyone gets” is about 118.25k. With 10% individual bonus at c.130k (on the lowest end). MC bonuses are 10-35% as well as far as I’m aware and are entirely discretionary, so if Macs have a 10% non-discretionary bonus, total comp is close to CC and FBD et al. and certainly better than A&O and Links…well at least at the very junior end.
2PQE
Correct – and the non-discretionary is 11.3% this year
So you're telling us that Macs still pays less further up the PQE scale
You do realise that 5PQEs at MC firms start at 140-150k, right?
And that’s before any bonuses, discretionary or otherwise.
You’re not exactly proving your point very well…
Save me some pie
Fieldfisher are the real stingy ones here. They really need to be hitting £100k with their results as of the last few years!!!! (PEP is now above major city players)
Lol
No it’s not and it only now broke 1 milly PEP. That’s still good but other top city firms have done the same..
Also they pride themselves on “work life balance”.
Stuck
Does anyone who has looked at the firms closely know: which is the better firm to train/work at, Links or Macfarlanes? From a career progression, work life balance, culture perspective…
Truth
Yeah diversity is a myth there…
Anonymous
That PEP is massive
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