London NQs continue to earn £179k
US outfit Akin Gump has confirmed that it has placed a cap on the exchange rate it uses to calculate its London lawyers’ salaries.
Earlier this week Legal Cheek speculated that the drop in the value of the pound against the dollar might lead to jubilation amongst lawyers working at some US-headquartered firms’ London offices. That’s because many of these firms base their pay on a dollar figure which is then converted to pound sterling.
Many US firms decide a spot rate that fixes the exchange rate for a certain period of time. For Akin Gump that spot rate is decided at the beginning of each quarter, with the last quarter’s rate running from July to September being set at £1 = US$1.2005.
At the start of the year, the firm decided on £1 = $1.3553 for its spot rate which put its March salary hike at £159k. The firm then tweaked this rate to £1 = $1.3109 for April to June, boosting NQ base pay to £164,000. The July to September adjustment handed NQs a base salary of £179,000.
The US outfit has now decided to stop matching the actual FX rate, introducing an upper limit of 1.2 and a lower limit of 1.5.
|Class year||Cravath scale||Live conversion rate (£0.92:$1 used here)||Akin Gump pay based on capped conversion rate|
Figures have been rounded