Magic circle firms split in assistant salary war

Allen & Overy (A&O) and Linklaters & Alliance are reigniting the salary war by giving unexpected across-the--board increases to assistants.

The two firms, which conduct their main salary reviews in May, are upping wages for all legal staff at a rate equivalent to another six months post-qualification experience.

Their November reviews are normally only nominal, and it is rare for the magic circle to make salary shifts twice in a year since the recession years of the early 1990s struck.

Newly-qualified lawyers at A&O will now be paid £45,000, up from £42,000, an advance of half of the increase of their normal annual review.

One year-qualified lawyers now get £50,000 instead of £45,000; Two year-qualifieds get £58,000 instead of £54,000; and three year-qualifieds get £64,000 instead of £61,000.

The changes at Linklaters are the same, but the most junior lawyers will not receive the increase. Newly-qualifieds remain on £42,000 and six month-qualified lawyers will get £45,800. Market sources predict that Linklaters is planning to change the rates for junior lawyers in line with the rest of the market in the next few weeks.

Last week The Lawyer reported that Slaughter and May partners are considering pay rises of 15 per cent for assistants to compensate them for an increasing workload, and to try to stem the flow of assistant departures (The Lawyer, 23 October).

A 15 per cent increase would put newly-qualified rates up to £48,300, which is well above the rates offered by competitors.

Freshfields and Clifford Chance are yet to make a move on the salary issue, but they will probably follow suit in the light of the market moves. Both undertake their main salary reviews on 1 May, but they do not conduct a review in November. The move by A&O and Linklaters put magic circle firms out of step with each other.

Linklaters' director of human resources Geoff May says: "What we're doing is moving through one half of a band, or six months. Newly-qualifieds aren't moving through half a band.

"This is mainly because of pressure in the recruitment market and the demand for lawyers. All parts of Linklaters are really busy. The predicted growth this year is very ambitious and there is a lot of pressure to hire people in the marketplace at the moment."

He says Linklaters reintroduced a second annual pay review in 1997. In the boom of the 1980s most firms raised their pay twice a year, but that was abandoned during the recession of the early 1990s.

Clifford Chance managing partner Peter Charlton says: "Our position is that we keep things under review. We think our salary structure is alright as it stands at the moment, but if the market changes, then we'll look at it again.

"In the absence of the market moving, we weren't really proposing any particular pay review in November. We don't think we're experiencing any problems that are worse than anybody else's."