High-flying transatlantic wage splits partners

Opinion is divided on White & Case's move to hike London newly-qualified salaries to New York levels, reports Helen Sage

News that US firm White & Case is to start paying New York-level salaries to newly qualified lawyers in London has been met with confusion by the City.

UK City firms suggest they may be forced to raise their salaries, but only if the other US firms with offices in London follow suit.

But their reaction to the news could not be more mixed. Some attack the move, while others suggest a wages hike is inevitable.

Stephen Beharrell, senior partner at Coudert Brothers' London office, said his newly qualifieds thought the move was mad. He said: “Any firm that increases its overheads reduces its ability to be price competitive and get the most interesting work. Good lawyers are attracted by good work, not inflated salaries.”

He added that the Couderts office in London paid London salaries to everyone.

John Austin, of Sidley & Austin, said the move was a good way of attracting people who wanted a short-term salary boost. “The best talent looks beyond that though,” he said.

James Johnson, senior partner at LeBoeuf Lamb Greene & Macrae, said if he were one of White & Case's clients he would be outraged by the increases. “Clients will immediately associate huge salary increases with higher bills.”

Stephen Fiamma, senior partner at Jones Day Reavis & Pogue, said the increase in salaries would affect training opportunities for newly qualified lawyers. He said: “If clients know how expensive young lawyers are they will object to them attending meetings which provide valuable learning experience.”

Fiamma admitted, however. that bringing UK salaries in line with the US was an inevitable consequence of the modern international practice. He said a similar situation had arisen in Jones's Paris office.

“You can't run an office with salary discrepancies between employees. It wouldn't surprise me if everyone went down the same road,” he said.

Bill Morrison, senior partner of Bryan Cave, said: “Salary discrepancies are obviously an issue we will have to address. It is an inevitable consequence of globalisation, but client sensitivity is also very important.”

Daniel Bushnell, senior partner at Rogers & Wells, said discrepancies in salaries for newly qualifieds was just one part of a range of problems that will begin to emerge from cross-Atlantic practices.

“US and UK practices work differently. At the very least this might put pressure on UK lawyers to reconsider the traditional lock step partner compensation system.”