Dollar-pegged NQ pay packets at elite US firms swell to around £200,000 as pound plunges to record low

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UK mini-budget tax cuts causes pound to tank

Lucky newly-qualified (NQ) lawyers working at some US-headquartered firms’ London offices are seeing salary hikes to around £200,000 as the pound hits a record low dollar valuation.

The devaluation of the British pound against the US dollar will affect those working for firms who base their pay on the dollar amount. These firms take two approaches to currency conversions for salaried employees: either they follow the live rate or decide a spot rate that fixes the exchange rate for a certain period of time.

The Cravath Scale, which is used as a benchmark for lawyers’ pay at US firms, puts NQ pay at $215,000, equivalent to over £198,000 at the time of writing — a hefty uplift of £21,000 on the £177,000 conversion figure from last month.

US Cravath payscale at current conversion rate (£0.92:$1)

Class yearCravath scaleConverted to GBP

Figures have been rounded

This is the latest money bonanza for lawyers to come from the Chancellor Kwasi Kwarteng’s mini-budget that will reverse the planned rises in National Insurance and cut the top rate of tax for those earning over £150,000 from 45% to 40% from April 2023.

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The tax cuts will have the greatest impact on City partners. Slaughter and May equity partners are expected to save around £178k on their tax bills, whilst Macfarlanes and Magic Circle equity partners enjoy tax breaks to the tune of over £100,000.

Firms with equity partner tax savings of >£100,000 from April 2023

RankingFirmPEPTax saving
1Slaughter and May£2.96 million (estimated)£178,000
2Macfarlanes£2.48 million£148,000
3Freshfields Bruckhaus Deringer£2.07 million£122,500
4Clifford Chance£2.04 million£120,500
5Allen & Overy£1.95 million£115,000
6Linklaters£1.87 million£110,000
7Hogan Lovells£1.8 million£106,000

Figures have been rounded

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Cap and collar

Daily Mail tier journalism. No US firm pegs or has ever pegged salaries to the dollar in the way this article is implying. No wonder you neglected to actually name a single firm that is now paying anyway near 200k as a result of the exchange rate.

At least you’ll get the clicks you want.



Also, how have they calculated these partner tax cuts? To me it looks like at least one error is that they’ve assumed the additional tax rate previously applied to the full PEP rather than just everything over £150k.

Can’t wait for follow up articles for every other x% movement of the £:$, even where no US firm has actually updated salaries.



Nope it correct when you add the 5% over £150k and without the 1.25% NI. Why do they say lawyers cant do maths?


Cap and collar redux

Not for associates’ annual salary, and therefore agree article is misleading. Some US firms do pay at spot (or close to it, such as a monthly fix) for partners, and/or for associate bonuses, in London.


Well actually…

STB (elective), Akin etc…



Akin conversion rate due to change in October



Rubbish – every firm collars at an FX rate well above (or below, depending on your viewpoint!) the current one.


Us guy

STB definitely don’t – associates there have an option to elect to receive pay in USD.


US assoc.

We fix on the fx rate of close of first business day of each quarter. 3rd of Oct is our next fix. Mad how folk profess they know how every single US firm in the City do it.



Are they lucky? Hours will be disgusting



This is true. You will be pumping out ridiculous billables per week. It comes down to priorities.



surprised that this post hasn’t been met with a chorus of freshers screaming “but Magic Oval firms are just as bad reee”



I’m going to make that comment. I’m a 3PQE in a US team which is almost exclusively made up of ex MC and other large U.K. firms. Pretty much everyone agrees that they worked just as hard at their previous firm, and if they didn’t, the difference is minimal. I came from an MC firm which had dreadful tech and forced every solicitor to adopt as broad a practice as possible, which meant I didn’t always fully understand what I was doing, and when I did, it would take forever anyway. Everything at my new firm takes a fraction of the time. Honestly, moving to this US firm was the best thing I’ve done in my career. My previous firm didn’t even have an hours target but I worked far, far harder and it was more tiring day to day. The people were also worse.



This is surely Slaughters lol



I’m at US firm and used to be at a Silver Circle. Also worked same (or minimal difference) to last firm



Swear it’s only akin and STB that lay in US dollars? Doesn’t Latham tooo?



Absolutely not Latham – we’re fixed



Latham fixed at £1:$1.45, horrible exchange rate and creating a large paygap



Latham changed recently to 1:1.31 I believe. Not there myself, but few of my friends are and I THINK I am remembering correctly


Mrs 007

STB/AG London are expected to change their policy soon because their invoices are in GBP and PE work is drying up.



Vinson & Elkins pay at spot



Yeah but you have to work at Vinson and Elkins….lol



If money is top of the market then who cares. Would rather work there that at a ‘prestigious’ magic circle firm doing the same soulless work for the same hours at less pay.



Lmao you have zero idea what you’re talking about fresher, bless.

Try working at a dead-end place like V&E for a few months, then come back us once you’ve dropped your training wheels ok?



Have you worked there, Roflcopter?


What a naive comment


Only dead end if you have no ability lol



Ok thx fresher, keep staying hard


Those uk firms that are on 95k, why can’t they just add an extra 5k to make it 100k or does a bonus take it to 100k???



Why cant they just add another 100k?



Can someone actually verify whether STB, Akin and V&E pay spot or is this just guesswork?



Still everyone who can leave the UK must be thinking about it. The prospects of the debt burden and a Labour government are terrible.



With Brexit, the Johnson years ineptitude and now the Truss crazies in charge, I’m not sure anyone could’ve mucked up the UK economy as much as these muppets have, even if they tried. I think a lot of the country feels the same. Tories gone next election (and good riddance). Rishi was a better choice and they bottled it.



All true, but the mess will be funded by punitive taxes piled on punitive taxes on higher earners by a Labour Party pretending to be Blairite while really be riddled with leftist extremists. And it was Blair that brought in the 50p rate. If/when Labour win I’m out of here. The “we will reinstate the 45p rate and spend it in nurses” vomit yesterday shows the mindset that higher earners are just a cash machine for these socialists. They will be going to that cash machine a lot and taking out a lot of cash.



Somebody has to pay for the utter mess left by the Tories/Brexit.


Confirmatory Confirmer

STB confirmed: people here had the opportunity to opt-in to receive the average forex rate for the previous month. So in October, I’ll get the September average. One off election, bad kick if the dollar tanks and the pound shoots the lights out. Means that some people are still on the old fixed arrangement (helps to get a mortgage, etc), whereas others are on the new arrangement.


NRF Assoc

NRF salaries swelling due to this fyi


quit lying joka




Misleading. Not a single US firm pays spot/month. Most firms that do pay some type of variant (like K&E) use “fx rate collars” meaning that they only allow fluctuations between 1.26-1.63. So the best rate you’ll get is 1.26 (or £170K NQ), still good whack, but far off the £200K mark the articles implies.

Also: don’t expect firms to be readily lower the fx rate, or up the base Cravath rate in NY. Tough times ahead. I billed 2,300 hours (average YTD) until last month and am doing fuck all atm. Deals are drying up and firms will need to toughen up to weather the storm (recession) which we’re evidently nosediving into.

Coming from someone who’s been at US shops for the past 8 years (and won’t make partner for another 12, which is the *true* cost of being at a US shop, *NOT* the “bRuTaL hOuRs” like some on this forum claim).


SC midlevel

When you bill 2300+ hours at a US firm do you get paid more than cravath bonus or do you just hit the “target” which makes cravath bonus payable and then all extra hours are for no gain?



If you hit target you get the bonus (so eg at senior end it’s an extra 115k minimum on top of the 400k). If you bill super high, you get a bonus on top of the standard bonus (usually up to double – but that is rare).


Anonymous lpc student

Is this sustainable?


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