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Confident Linklaters Lifts Associate Pay Nearly 4 Percent
The slowdown in deal activity had led some U.K. lawyers to predict pay would generally go unchanged this year
Legal Week
April 30, 2008
Linklaters has announced raises of nearly 4 percent for junior lawyers, Legal Week can reveal, in what will be seen as a confident move from the U.K. giant.
A newly-qualified solicitor (NQ) at the Magic Circle law firm is now set to earn 66,600 pounds ($131,500), up from 64,000 pounds ($126,300) in 2007.
Moving through the bands, the percentage increase drops to 2 percent for lawyers with one year post-qualification experience (PQE), who will earn 70,400 pounds ($139,000). Second-year-qualified lawyers see a similar rise, moving from 81,000 pounds ($160,000) to 82,600 pounds ($163,000). Pay for a third-year-qualified lawyer rises from 89,000 pounds ($175,600) to 90,800 pounds ($179,200).
Trainees' pay will rise 4 percent from 36,000 pounds ($71,000) to 37,400 pounds ($73,800) in the first seat.
The rises put Linklaters ahead of starting salaries offered at Clifford Chance, Freshfields Bruckhaus Deringer and Allen & Overy, which have all yet to announce their 2008-09 pay structure.
The move represents a far more modest rise than the bumper increase of 16 percent unveiled by Linklaters last year but marks the third consecutive year in which the firm has raised its core pay bands for junior lawyers.
The move will be seen as an expression of the firm's confidence given that the global turmoil in credit markets and the slowdown in deal activity had led some City lawyers to predict that the pay bands would generally go unchanged this year. In comparison, inflation-busting pay hikes awarded by London law firms in 2000 and 2001 where effectively frozen until 2006.
In addition, Linklaters also operates what is regarded as one of the most generous bonus schemes in the U.K., which can allow top-performers to earn as much as 50 percent of their base salary.
New York's Shearman & Sterling also announced a 7 percent hike in its London-based associate pay-bands on Tuesday, putting its NQs on 80,000 pounds ($157,900) a year -- among the highest rates in the City.
Evidence of continued pay inflation for the junior lawyers will put renewed pressure on leading U.K. firms to at least put in place inflation-linked rises to their assistant track.
In comparison, Freshfields and Allen & Overy currently pay NQs 65,000 pounds ($128,300), with Clifford Chance offering 63,500 pounds ($125,300). Freshfields is expected to announce the results of its pay review within the next two weeks.
