A little more light has emerged on the going rate for junior lawyers at the Magic Circle, with Allen & Overy (A&O) and Clifford Chance (CC) this week confirming more details on their new pay scales.
A&O confirmed that it has increased its pay bands for junior lawyers, with newly-qualified (NQ) solicitors earning £81,000 in salary, a 3% rise on the previous rate of £78,500. As a result of the revamp, first-year trainees will earn £44,000, rising to £49,000 in year two. The City giant has disclosed no details on bonus awards.
Meanwhile, CC’s NQ associates will be in line to earn £87,300 in total compensation including ‘binary’ bonuses, also representing a 3% increase of last year’s package of £85,000. First-year trainees will earn £44,800, 3% more than last year’s £43,500, while second years take home £50,500, up on last year’s £49,000. Unusually, CC refuses to disclose the breakdown between salary and bonus.
The rises, which comes as more profitable US rivals have stoked the market for junior City lawyers with £100,000-plus deals for junior lawyers, put A&O’s salary just ahead of Slaughter and May at £78,000 and Linklaters at £78,500. With bonuses, NQ lawyers can earn up to £90,000 at Linklaters, while Slaughters’ bonus brings total earnings for juniors to around £85,000.
Freshfields Bruckhaus Deringer confirmed in August that it was freezing associate pay at £85,000. This rate was established last year when the firm overhauled its compensation structure to hike base salaries from £67,000 to £85,000, a 26% rise. The move came as Freshfields phased out bonuses for junior lawyers, rolling them into its salary.
However, comparing compensation for lawyers across the City has become more difficult in recent years as firms have shifted from associate lockstep, where solicitors are paid on strict seniority, and become less transparent on packages for junior lawyers.
The latest rises also reflect the conflicting forces that City firms are wrestling with as they face intense fee pressure from core bluechip clients and subdued growth, while predatory US firms continue to bid up market rates for the best deal lawyers. That has largely left the City’s legal elite trying to square the circle through being less clear on what they offer their raw recruits.