Freshfields cuts associate pay bands
Magic circle firm Freshfields Bruckhaus Deringer is reversing its associate salary bands with all associates set to receive the same level of pay from May, despite gaining a year in post qualification experience.
As a result of the changes, the salary paid to newly-qualified (NQ) solicitors will drop from £66,000 to £59,000. Associates with one year of experience will stay on their NQ salary of £66,000 while the pay band for those with two years PQE will be £73,000 and for three years PQE will be £86,000.
The salary for first year trainees will remain unchanged at £39,000, while second year trainees will continue to receive £44,000.
London managing partner Tim Jones said the decision was taken in response to challenging market conditions.
He added: “This is an appropriate and proportionate response to the world we now find ourselves in. While the firm continues to maintain a strong position in the marketplace we need to control costs, continue to focus on the needs of clients and to deliver the highest level of service.
“We believe these measures will put us in a strong position to achieve these aims.”
Jones said the firm will be paying bonuses in June as normal with the total payable to individuals to be decided near the end of the current financial year.
That said, Jones added that the total bonus pool would be lower than last year’s. At the end of the 2007-08 financial year associates with one and two years PQE were eligible for a maximum payout of £20,000 while those on three years could gain a maximum bonus of £35,000.
Last year Freshfields increased associate salaries by an average of 2 per cent, having raised them by an average of 19 per cent at the end of the 2006-07 financial year (6 May 2008).
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Readers' comments (35)
Anonymous | 9-Feb-2009 2:13 pm
Responsibility
The choice is fairly simple; if turnover is expected to decrease, partners can either take home a little less or pass on the pay cut to their associates . The decision taken by Freshields therefore is to put the financial interests of their 400 Partners before those of their 2,000 associates. It should be no surprise to those Partners when, over the next year or two, those same associates decide to put their own interests first by moving to a firm that treats them a little better.
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Anonymous | 9-Feb-2009 2:35 pm
Equity
So will we see the partners' equity points frozen for the year as well?
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associate | 9-Feb-2009 2:51 pm
sounds good on paper
Yeah, but where are they gonna move to exactly?
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Anonymous | 9-Feb-2009 2:53 pm
whiners
Get over it.
Boohoo, I will have to stay at a measly £66,000 salary for another full year. How am I gonna afford the payments on my third holiday home, my yacht and my sports car?
Pathetic, gimme a break.
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Anonymous | 9-Feb-2009 2:54 pm
Such hardship
Why does anyone feel sorry for City associates. They need to get real - we're in a recession and people are losing their jobs. I know it's though but i'd rather take a pay cut than not have a job at all.....
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Anonymous | 9-Feb-2009 2:57 pm
Better than the rest
Well, based on the limited information here, I say rather the Freshfield's way than CC/Links etc....
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Anonymous | 9-Feb-2009 3:08 pm
I agree
The greedy partners at Freshfields should be ashamed of themselves! Why pass the buck to the associates who are probably paying mortgages and trying to keep on top of the bills......!
It's not just a little dent in their pay packets we're talking about either. Thousands of pounds might not seem a great deal to partners but it makes a huge difference to the rest of us!
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ex MC associate | 9-Feb-2009 3:41 pm
What a miserable existence
That's how natural attrition works.
Incrementally, bit by bit, you start treating your staff meaner until you've lost everyone but the uber-keen.
Take all the fun out of the job by cutting out all the perks like taxis, free fruit, regular pay raises, bonuses, then start hitting even some bare minimum hygiene factors like good atmosphere and collegiality.
And soon, people will hate being an MC lawyer, everyone will be out to save their own neck and the billable hours they can amass or pad in some way or other to keep themselves safe.
And that's just at the associate level - partners will feel the same way, protecting their associates and little fiefdoms and before long, there's little point in being in an international firm and everyone will think that Slaughters got it right.
Let natural attrition run its course and let the era of the MC come to an end.
High time too.
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ANON. | 9-Feb-2009 3:42 pm
Let the market decide
My advice for anyone, at any firm, is to do as you are done by. If the firm tells you it is cutting pay or jobs to stay competitive, that isn't inherently wrong, but means that you should respond to them on the same basis: if they aren't offering a competitive package, jump ship to the firm that is.
Some firms will sacrifice all collegiate culture to proft, some sacrifice none, and most find a point of compromise somewhere between the two poles. You just need to decide what motivates you, and choose a firm which sets the fulcrum at the same place you do.
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MC lawyer | 9-Feb-2009 3:47 pm
Grow up
While FBD associates might receive less than in the past, they are clearly still staggeringly well paid by the standards of most people. Let's keep a little context before we start talking like we're employed in a sweatshop, shall we?
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