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Herbert Smith Announces Pay Freeze for Associates
Legal Week
May 01, 2008
Herbert Smith has confirmed that it will not be increasing associate salaries for the next financial year.
The news, which comes after several years of bumper pay rises, makes the top 10 London firm the first to confirm that its salary bands will stay static, with associates simply rolling into the next pay band.
Salary bands will remain the same as last year, with a newly qualified solicitor (NQ) taking home £64,000, a lawyer with one year's experience pocketing £69,000 and a lawyer with two year's experience earning £81,000. Trainee rates remain at £36,000.
The announcement, which comes after Herbert Smith last year reported a drop in profits per equity partner of 2.3 percent, falls into line with widely held predictions that associate salaries across London would stay flat for 2008 following the market downturn.
Linklaters defied these expectations earlier Wednesday when it announced that its NQs would be receiving a 4 percent pay increase, taking their salaries to £66,600. Those with between one and three years' post-qualification experience will see a 2 percent increase in pay.
U.S. giant Shearman & Sterling on Tuesday announced its own pay hikes, lifting NQ rates by 7 percent, to £80,000.
The move by Herbert Smith will be watched with interest by London rivals, many of which have been hoping to avoid significant increases.
Meanwhile, Herbert Smith has announced the promotion of 10 senior associates to of counsel. The role was introduced two years ago as an alternative to partnership. This news comes after the announcement in March that Herbert Smith was raising 18 lawyers to partnership level and means the firm now has 25 of counsel.
Managing partner David Willis said, "My congratulations go to all of our new of counsel, whose promotions are a testament to the high standing they have within their practice areas and to the contribution they make to the broader success of the firm."
