London associate pay war bleeds into holiday season as Jones Day raises NQ rate to £140k
Pay hike comes days after Norton Rose Fulbright raised its NQ salary to £105,000
Jones Day and Norton Rose Fulbright (NRF) have become the latest top firms to raise associate pay in London as an ongoing salary war extends into the summer despite dire warnings of a looming recession.
Jones Day has increased salaries for its newly qualified (NQ) associates by an eye-watering 27%, taking its pay from £110,000 to £140,000, according to Legal Cheek. Although the firm would not comment on its rate, the salary is outlined on its website. Trainee salaries start at £54,000 rising to £61,000 after 12 months.
The NQ salary rise creates a yawning gap between the US giant's London pay rate and NRF's newly set NQ salary of £105,000, up from £95,000, which the firm set in January.
Jones Day's new rate also allows it to leapfrog the highest-paying UK firms - Magic Circle duo Cliffford Chance and Freshfields Bruckhaus Deringer - which both offer £125,000.
However, it still puts the firm £24k below the highest payer, Akin Gump, according to Legal Cheek's research (see table).
Firms have been raising their rates throughout the year. For example, in April Slaughter and May increased associate pay by up to 20% following a review into pay and benefits and Weil Gotshal & Manges raised its pay by £5,000 to £150,000.
Legal Cheek The Firms Most List 2020 - Newly Qualified Pay at Selected Law Firms
|Kirkland & Ellis||£150,000|
|Debevoise & Plimpton||£145,000|
|Herbert Smith Freehills||£120,000|
|Slaughter and May||£115,000|
|Allen & Overy||£107,500|
|Norton Rose Fulbright||£105,000|
Nick Robbins, founder and director of Nicholas Scott Global Legal Recruitment, noted the variety of salaries being offered in the City of London and the frequency at which new rates are being set.
“Pay rates used to be set at fixed intervals. now firms seem to be monitoring pay scales closely and making a move when they feel the gap with competitors is too wide,” he said. “But it is also interesting to see how some firms are using pay to make a statement about their position in the market with Herbert Smith Freehills, for example, offering higher pay than a number of Magic Circle UK firms.”
When it comes to NQ pay in London, the cards are weighted firmly in favour of US firms, which benefit from being anchored in the lucrative US market. Furthermore, US firms with smaller London operations can also afford to extend their rates even beyond the likes of White & Case, Latham and Kirkland, which all operate large London teams.
However, dire economic forecasts in the UK, where an extended recession is now predicted, do seem to be having an impact with Magic Circle duo Allen & Overy and Linklaters so far resisting the temptation to up their rates.
Simon Marshall, founder of legal specialists TBD marketing, said: “Firms are negotiating on a tight rope. On the one hand, great talent is scarce and they need to pay top dollar in order to attract and retain the best. On the other hand, we have the governor of the Bank of England saying there’s going to be a recession and clients are increasingly hacked off with newly qualifieds earning more than they do with much less experience."
Under NRF's revised pay scheme, NQ lawyers will make £105,000, with those who achieve the required hours having the potential to earn between £118,125 and £147,000. Other pay bands have also been raised, although the firm declined to provide details.
Meanwhile, NRF has joined a number of firms in upping pay for employees on lower salaries with those on less than £48,000 receiving a rise of at least’ 5% and up to a maximum of 10%.
The firm said the increases were a direct result of the ongoing cost of living crisis and were aimed at providing ‘sustained’ and ‘longer term’ support to staff.