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Simpson Thacher boosts NQ lawyer rates in London to £170k

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£12k rise 📈

US outfit Simpson Thacher & Bartlett (STB) has handed its newly qualified (NQ) lawyers an extra £12,000 as the City law pay war continues despite some Magic Circle firms’ more cautious approach associate pay.

STB’s near 8% wage hike came into effect from 1 November and will see its NQs in London earn a base rate of £170,000, according to an email seen by Legal Cheek.

Those further up the ladder are also cashing in. The US firm’s one-year PQEs will now take home £178k, whilst 2-PQEs get £198k and 3-PQEs near a quarter of a million at £233k, the email states. Further up the ranks still, four-year PQEs will now receive £273k and salaries for seven-year PQEs has grown from just under £300,000 to £328,000.

This marks continued pay rises for STB’s junior lawyers following increases at the start of 2022.

STB has been approached for comment.

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During the summer, the Magic Circle broke ranks when it came to salaries with Linklaters and Allen & Overy keeping NQ pay at £107,500.

A&O cited the “challenging” economic conditions as the reason for stalling on NQ pay rises, whilst Linklaters told its junior lawyers: “we do not believe that the right course of action is to rush into matching salaries at NQ level without properly considering the impact of any changes and the wider economic context”.

This has not stopped NQ pay rises elsewhere, however. Herbert Smith Freehills was quick to overtake the majority of the Magic Circle with a new and improved NQ pay packet of £120k.

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57 Comments

Allen Overy

I’m a Magic Circle Lawyer – GET ME OUT OF HERE!!

Anony Mouse

Time to jump ship, methinks.

Garth

But prestige

Anon

Whilst Cooley are implementing stealth layoffs

Anon

Couched as performance related but coincidentally occurring at a time when PE work is on the downturn. Expect to hear more stealth layoffs from firms heavily reliant on the tech dollar

Anon

They don’t even do a ton of PE work. It’s just a crap firm

market observer

hardly – they’re just heavily reliant on the Tech sector.

Sigma male

Earning almost £70k more than a Links and A&O NQ is unbelievable. Small intake and many recent laterals will be turfed out in the recession, but retention will continue to be a big problem at the senior level for MC firms.

Anon

It’s more than that – these are just base rates , they will get a cravath level bonus on top as well just for being in good standing whereas MC firms are far more stingy about bonuses. At senior associate level you’re talking about a gross difference in pay in the region of over 200k which is insane!

MC Insider

Certain MC firms are offering substantial bonuses for those who go above target (target substantially lower than US firms obviously). Base rate is higher in US firm still yes but some of the stronger MC are offering incredible bonuses now, so the bonus difference isn’t as vast. A&O/Links agree pretty pathetic though.

Anon

This just isn’t true , the bonus trigger at the likes of Skadden is 1800 hours of which 200 can be pro bono. At an MC firm 1800 hours gets you around 10 % bonus.

MC Donald

At the MC I’m at you’d get more like 30% at 1800 hours now, and it can go up to 60-70% notionally if you hit targets that represent fairly typical hours at STB or K&E. It will still be lower overall pay but probably 30% lower rather than half like a lot of people think. And you get the advantage of more varied work/areas of practice, probably more job stability, probably a better shot at equity partnership, etc.

Anonymous

This isn’t true today. The new CC bonus scheme introduced this year will give a 5PQE c. 80k for 1900 hours + 65k for being ‘high impact’. In other words partners can give a 5PQE they want to keep a bonus of 145k, on top of a 170k salary.

Of course, discretionary bonus schemes is less good than base salary + more or less guaranteed bonus.

Curious George

Magic Circle Lawyers – why are you staying put?

The Man With The Yellow Hat

When you lot are burnt out and laid off, we will be looking forward to the joys of equity.

Peter piper

Lol keep dreaming of that MC equity partnership

Anon

Because of mass redundancies, stealth layoffs, and short tenure at the US shops. Personally the stability is more important to me.

Lawnoob

Stupid question but what are stealth layoffs? Do the firms just stop giving you work or do you come back to find your job has dissapeared? How does it work?

Equity

Equity

Idk

Probs just to tell people they’re Magic Circle lawyers

MC

Recent news headline – ‘Cleary announces first female partner promotion in London since 2017.’ That’s not very enticing to me as a woman!

MC Lawyers

This idea that MC lawyers can very easily jump ship to the far higher paying US shops is… suspect. The MC each take about 100 lawyers a year. With such a large intake, many people who are just simply not that bright get in. A lot of people also just go to the MC because they lack imagination or any original thought for what they want in their careers, and are drawn to what they think is a safe bet and safe name.

3,000 BILLABLE HOURS BIG BOI

Lmao and what, every pro-forma document gimp at a US shop is somehow a genius? 😀

US firms primarily thrive on people who are willing to insert the jet-black latex shaft a whole lot deeper than anyone else in the City, that’s it.

poopot

There’s lots of truth in this. US associates aren’t always the most talented or the brightest but they usually are the most resilient. You could be the best lawyer in the world but the idea of 2.5k chargeables a year might seem like something you’d never want to do – at any price.

Eumigrant

US shops (including the best ones) are full of average associates who moved from international firms (not necessarily MC/SC) with average CVs for the money. I got offers from 3 white shoe firms and am myself average and don’t even speak English all that well (judge me when you work in a foreign language). That’s not to say there aren’t excellent lawyers at US firms but they are definitely not more selective than an MC firms. Actually when it comes to university grades, Kirkland for example even accepts people at Nq level who failed a number of their LPC subjects – academic rigour is different from “PE wealth slavery” rigour and they know it.

Bystander

I think ex-MC US associates are cool. US firm trained associates are generally pretty average, with very few exceptions. I tend to agree that many associates in levfin/PE aren’t particularly bright, even though they make the big cock £££.

Hmm, smell a hint of jealousy

What do you mean aren’t bright, they must have something right that’s “bright” to get in a position to earn the money they earn now.

Bystander

Fresher, transaction work can be done by anyone, even my grandma. There are very few bright associates who want to qualify in transaction team for that reason.

Smart associates tend to work in practice with a real mix of work and non proforma based team like regulatory, competition, employment and restructuring.

Lol

Would call lpc academic rigour lol

Jelousy Stinks

Hahahah if you check the calibre of the K&E trainees they almost exclusively hire from Oxford, UCL, LSE, Cambridge whereas the magic circle trainees come from a range of mid tier universities, albeit with a sprinkle of top graduates.

Bagman

LMAO sure son 😀 😀 😀

Anon

Huh? There are NQs who are we’re not even offered roles on qualification at SC shops who went to US firms including STB. Over the past couple of years they’ve just wanted bodies. If you’ve got into a MC firm, it’s simply about talking the talk convincingly enough to get out, the idea it’s about being particularly bright is a nonsense.

I know a guy

This isn’t entirely accurate.

Their salary was pegged to the dollar. Once the pound fell into the gutter and NQs started making nearly 190k, the partners thought best to redirect funds towards their own pockets.

Shoutout to the poor STB NQs taking a pay cut.

insider

STB associates choose whether they get paid in the dollar or GBP. It’s a one time choice.

Anon

It was. That’s all changed now as the pay was getting absurd.

Dollar

Beasty numbers. Sad comments from those who can’t hack the dollar train 🙁 choo choo to the bank boiz

KLAXON

!FRESHER ALERT!

Ex US law firm lawyer

The quality of the associates is terrible. STB have very strong partners but the work the teams churn out is awful. They get paid loads to always say yes and always be available and have no life. The morale is low and attrition rate is awful. Fine for a couple of years but you best have an exit plan. Inflated sense of ego from being paid 200k but can’t even negotiate the most simplest of points

MC Lawyer

This is a somewhat debatable comment. The associates are generally pretty good and often ex-MC in my experience acting opposite. Everyone who has left my place to go there are fairly solid lawyers, certainly not underperformers.
I have encountered a couple of duffers though.

Lmaobantah

It was ever thus. Some of the thickest, rudest associates I’ve ever had the misfortune to deal with were your cookie-cutter Hurray Henrys from the likes of Kirkland or Willkie Farr who didn’t have a fig about what they were doing.

MC senior associate (Band 1)

STB is a cute firm. Their finance team is consistently lousy. Band 1 purely because of their top US sponsor clients. The associates are essentially machine sending out sponsor precedents and have no analytical skills..

MC Partner (Band 1)

Quite. You’re still not getting a raise though.

PE client

As a client of many of these US law firms, I wholeheartedly agree with this sentiment. Quality of associates at these US firms is woeful. Don’t get me wrong, having them on hand 24/7 to turn docs is great but anything that requires negotiating definitely requires partner input.

Actual US associate

What teams are you talking about re attrition? I know STB very well, and Corporate/PE and Capital Markets have each had low turnover in the last 18 months (post crazy period over Covid) – same as all other firms. And other major groups (restructuring, banking, funds, litigation, tax) the same. There is the odd person trying their hand as an NSP at K&E but on the whole departures are low and clients are happy.

Main difference between STB and a MC firm is that the MC associate will think clients want to pay for them to give 7 paragraphs on the law, its development and the current application – whereas US firms realise their PE clients generally just want to know “yes/no” and how they get to the desired commercial destination.

Nearly all associates at STB and other big US shops are either ex-MC or high achievers from Aus and NZ. So…the same as any MC firm. I’ve done c. 1750 hours so far this calendar year and will finish on about 1900-2000 hours. I did the exact same at my previous firm (MC). My firm has no billable targets and I’ve had to work more than the odd email on 3 days of holiday this year and was given extra leave days to compensate, and was reimbursed when I had to once tweak my plans. It’s an impost, but I’ll take the extra £170k in base compared to what I was getting at the MC (yes…you read that correctly) and my NY scale bonus that doesn’t depend on my billable hours.

MC Partner (Band 1)

Bro, most of the above are freshers. Except for me. I’m Magic Circle Equity, as per my name tag.

FFS

TW/AO/Birds/Linklaters all need to sort act out

Loool

Loool bird and bird are not in the same conversation

Bantah & Harmony

Well neither is Taylor Wedding mate. 😂

TW@

Some TW teams pay better than silver circle. Underrated firm.

An observer

Mate of mine worked here. Very much a weapon – jumped for the cash, highly capable of working hideous hours, and ultimately even he realised it wasn’t worth it after a couple of years.

Not a fresher

If you have been at a white shoe firm/top US firm for over three years then you are objectively “good”. There are plenty of average people at junior levels but they tend to have a ceiling and are sifted out once they reach that – usually 2-3 PQE.

Senior associate at US firm, rhymes with bin burg

I find there some really good lawyers at uk city firms and arguably better than the juniors at some US firms and that’s coming from a US firm

Once and for all

STB, Kirkland and Weil trained associates are quite poor and I believe it is driven by the culture of churning out precedent and not allowing lender designated counsel (MC and certain elite US like Shearman) to negotiate any legal points. NQ/1PQE are asked to run deals unsupervised and coupled with the high remuneration, these associates think they are “top” when they are in truth technically weak.

Anon

This sounds like the same bitter person persistently reposting. Were you rejected at a job interview?

Interested passerby

Sounds like you got rejected mate

Cry me a river

If you earn 90k or above, you are objectively well off ffs

who was in paris?

might just about be enough to pay your energy bills

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