Law firms beat banks on graduate pay
Trainee solicitors are the highest paid graduates in the UK, according to a new survey published today (8 July).
The median starting salaries for trainee solicitors in 2008 is £36,500, putting law ahead of investment banking for the first time, according to the Association of Graduate Recruiters (AGR) summer survey.
The median graduate salaries paid by investment banks and fund managers is £35,000. The average graduate salary across all sectors has increased by a modest 1.8 per cent from £24,063 in 2007 to £24,500 this year.
Simon Pilcher, graduate recruitment partner at CMS Cameron McKenna, said he was not surprised by the survey's findings.
"I'm not sure that this will be sustained in the long-term. Investment banking salaries track prevailing market conditions more closely than law firms'," added Pilcher.
Many of the larger employers in the legal sector, however, pay their first year trainee solicitors above the AGR average despite a number of large City firms announcing below inflation pay rises for their junior lawyers.
As highlighted in the Lawyer2B.com salary index magic circle firms Allen & Overy, Clifford Chance, Freshfields Bruckhaus Deringer and Linklaters pay their new joiners £37,000, £37,400, £39,000 and £37,400 respectively.
US firms, including Bingham McCutchen, Cleary Gottlieb Steen & Hamilton and Debevosie & Plimpton pay their first year trainees £40,000, while trainees joining Weil Gotshal & Manges and White & Case will receive starting salaries of £41,000.
Baker & McKenzie graduate recruitment partner Vincent Keaveny said: "The big jumps in trainee pay during the last decade have often been triggered by external factors such as the dotcom boom. There are currently no such pressures to boost salaries. That said, firms still have to be mindful of what their competitors are paying."
He added: "Investment banking is a career with real peaks and troughs. During the peak periods the pay is very good but bankers do have to work really hard for it but when things go down it can get very bad."
The credit crunch has not impacted on the number of graduate positions available, according to the survey, which revealed vacancies for university leavers will rise by 11.7 per cent on 2007. Though growth in vacancies has slowed slightly, almost three-fifths of employers surveyed by the AGR expected to report an increase in vacancies in 2008.
The top recruiting sectors continue to be accountancy and banking, which between them offer more than a third of all vacancies. The legal sector, meanwhile, makes up 7.4 per cent of the vacancies at AGR members.
To compare graduate salaries at top firms, see our salary index
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Readers' comments (20)
Anonymous | 8-Jul-2008 10:47 am
Enjoy it while it lasts
Law firms operate on a different model to investment banks. My personal feeling therefore is that law firms haven't yet felt the full impact of the credit crunch. I think we're going to be in for a period where costs will become a real issue for law firms so I doubt there will be any great uplift in lawyer salaries for at least the next six to 18 months.
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Associate | 8-Jul-2008 1:00 pm
Bonuses
Investment Banking grads and upwards receive bonuses which are not encompassed within the survey. Clearly, IB grads will come out with more.
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Anonymous | 8-Jul-2008 2:09 pm
Law school?
This survey - as others have done - also ignores the fact that banking graduates generally start work straight out of university - i.e. one or two years before law trainees who must do the LPC and often GDL first.
It would be better to average the first few years' salaries/grants (including the year/s at law school) - this would reflect the experience of recent graduates much more accurately.
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Anonymous | 8-Jul-2008 4:29 pm
comment
so lawyers are the best paid graduates. However, for the reasons mentioned above, they are probably poorer than IB graduates. Does anyone else think this survey is a bit of a farce?
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Anonymous | 8-Jul-2008 5:05 pm
Don't be too defeatist
True, but law firms are generally better prepared for an economic slowdown. Whilst the lack of M&A activity might cause corporate and banking departments to be less busy, other departments dealing with insolvencies/restructuring and litigation will be gearing up. Not all City law firms are dependent on buoyant financial markets.
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Anonymous | 9-Jul-2008 9:18 am
I wish....!
So what about us trainees who don't work in the magic circle firms, or even in london at all?! Unfortunately the grim reality for me after 4 years of hard work in uni and LPC is the minimum Law Society salary of just under £16,000. It's all a bit of a joke really when some of my non-qualified friends working in sales/recruitment roles are taking home at least twice that much! I for one do not agree with this article....
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Croesus | 9-Jul-2008 9:55 am
It's an average
Re the last post, the figure is an average, not incorrect (i.e. it's a statement of fact, not an opinion with which you can agree or disagree). If you're getting the bare minimum, that means that the top-paid NQs are getting even more than it might appear to still average out at such a high figure.
Not that, er, that's much consolation to you.
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Anonymous | 9-Jul-2008 10:31 am
Trainee Salaries
Also if you work out the hourly rate of these salaries to the number of hours actually worked by trainees, it is not such a good deal.
Obviously that is not how the pay deal is structured but it is how the law firms are charging overall and it does at a stroke reveal the ' real ' level of pay.
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Anonymous | 9-Jul-2008 12:31 pm
Trainee Salary
Not on that sort of money and have been qualified for 8 years in a small 2 partner firm in West Yorkshire
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Anonymous | 9-Jul-2008 8:05 pm
An average isn't a fact
I think Croesos is being unnecessarily snide there. By the way, the article actually says "the median starting salary". "Median" and "average" are two entirely separate things. Fact.
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