Magic Circle Pay Wars Report
The Big Law pay wars in London continue with Clifford Chance now lifting its newly qualified pay rates to keep pace with its competitors in the London marketplace, which has now seen junior lawyers’ pay increase by up to 50 percent over the past five years.
The pay wars have largely been lead by US law firms in London, forcing their UK big law competitors to equal the hefty paydays handed out to their lawyers.
Clifford Chance’s newly qualified (NQ) lawyer compensation has been raised to £150,000, lifting from the previous £125,000 level and continues the ongoing war for legal talent, matching pay increases from competitors like Freshfields Bruckhaus Deringer and Linklaters.
Early this month LA-based litigation specialist Quinn Emanuel Urquhart & Sullivan announced it was lifting its pay for base level salaries for London lawyers to £180,000.
The pay increases coming from the US law firms reflect not only their aggressive approach to pay – and work hours – but also the weaker pound, which has increased buying power for US clients operating out of the UK.
We have reported here on several occasions about the multimillion-dollar pay days for partners, earning up to $20 million, which has accelerated lateral movements among major firms on both sides of the Atlantic, with major increases in pay also in the US market.
The ‘Lagging’ Big Law Firms
Despite this substantial increase, Clifford Chance still lags behind the market-leading £180,000 NQ salaries offered by prominent U.S. firms such as Gibson Dunn and Quinn Emanuel. These top-tier American firms have set a new benchmark in the intensifying battle for junior legal talent in the City and pushed up the big law salary scale.
Only Slaughter and May and A&O Shearman now lag behind the other pay-meister leaders who have showered money upon their junior lawyers, where the firms maintain the previous £125,000 NQ rate.. Doubtless the remuneration committees in the firms will be considering their options, which are limited.
And it is not only NQ lawyers who are earning more. Effective September 1st, Clifford Chance will also boost its trainee solicitor pay, raising it from £50,000 to £56,000 in the first year and from £55,000 to £61,000 in the second year.
Again, this move aligns with the recent trainee pay increases implemented by Freshfields and Linklaters.
With these adjustments, Clifford Chance, Freshfields, and Linklaters now offer the highest NQ and trainee salaries among UK-based firms.
The latest salary hikes underscore the intense competition for top junior legal talent, as firms strive to attract and retain the best and brightest lawyers.
The pay wars continue to provide benefits for junior lawyers, but add some strain for law firm leadership amid a battle to retain legal talent in an increasingly competitive legal marketplace.
