City firms should slash NQ salaries to £50,000, say recruiters

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  • Heh!

    Perhaps the way to stop the exodus of staff from city firms at the end of their training contracts is to stop beasting them, rather than pay them less?

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  • Of course, NQ salaries at top City firms have already fallen by approx 6-10% since 2007/2008, before taking into account inflation and despite miniscule uplift over the last two years. NQs at such firms took a hit when the £64-66k mark was reduced to circa £59k in 2009. And how does lowering salaries prevent the exodus to the regions/in-house?

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  • Call me a cynic but it looks like legal recruitment firm Edwards Gibson have advised attendees to undertake a course of action that will only increase the migration of NQs to regional firms and in-house legal teams. Why would they want to do that?

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  • So reducing salaries will stop an exodus? Surely this will lead to more moving in house as the key motivation for many to stay in PP for the money will be lost. I say raise the salaries if the issue is people deserting the city...however, it's not the real issue. The real issue is less work means less productivity which means less demand which means less cost. Don't make this issue into something else.

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  • "Say recruiters." Say the guys who couldn't get into law or couldn't hack it while they were there. If anything, a good NQ with sufficient work is underpaid, not the other way around.

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  • If I understand it right the suggestion is that in certain practice areas clients are deserting the City firms in favour of larger in-house teams and/ or cheaper regional practices - presumably the reason Edwards Gibson would give is that this is largely cost-driven. And their proposed solution is to pay NQs less?

    If my assumption of what Edwards Gibson are saying is correct then that presumably means that the element of a bill on a particular matter that relates to time spent by NQs will reduce by 17% or so to reflect the lower salaries paid (60k - 50k) - always assuming of course that Big Law will pass on the reduced cost of NQ salaries!

    Surely when all other costs remain the same that means the overall reduction in costs to a client on any given matter will be minimal under this proposal - and presumably not enough to make clients consider a revision of the flow of work away from Big Law in certain practice areas if we are to assume it's purely cost-driven (which it isn't anyway).

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  • I love the fact that NQs think they can get jobs in the regions for this much. Oh I cant earn this in the City so I will move to the provinces. Get real folks - major regional firms at 5 PQE are only just (if you get a good one) paying this level!

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  • Perhaps it's how the story has been reported, but I am struggling to see how reducing salaries will prevent a jobs exodus. I can see how a failure to reduce salaries might increase work being "northsourced/shored", but that's not quite the same as a "jobs exodus" as reported here.

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  • How about Partners take a cut in their salary/drawings and the trainees who are on a tenth of those salaries keep there's the same?? No, I didn't thing a recruiter (who relies on extortionate bonuses, approved by said partners) would suggest such a thing!

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  • No doubt the article is suggesting that the work is being farmed out to the regions and not the NQs themselves. Pay less, charge less and keep the matters.

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  • @ Anonymous | 20-Mar-2013 1:49 pm
    I agree with you. I think that is exactly what the article is trying to say, but has been poorly written by the reporter which has led to the confusion experienced by the above posters.

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  • Edwards Gibson can officially jog on. It has never been tougher to become a trainee solicitor and you're suggesting to the profession that they reward those few who are successful with pay cuts? What a wonderful idea. If I didn't already have a training contract I would definitely be looking at other careers at this stage. When all you see every week is depressing news about how miserably difficult and uncertain life is for newly aspiring lawyers you can't help but be put off.

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  • I honestly cannot see how a reduction in salaries will stop an exodus to the provinces / in-house.
    First, the motivation for PP is different to the motivation for in-house. Second, simple market economics would dictate that, to attract / retain the best, you would offer more - or better conditions - than less. Third, from experience, there is a valid reason why people choose regional practise ... and it's not the cash!
    More to the point, if the logic as reported in this article is true of Edwards Gibson, I would not like to be represented by them.

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  • The article is a bit unclear but i think the crux of it is that clients are unwilling to pay lots of £ for what essentially is a very junior recently qualified lawyer. It's true that in the city the fees can double in a matter of days once a "trainee has qualified" - when in reality, they're not getting twice the value.
    Although i don't think this is a pragmatic solution to the problem because able prospective candidates will just go into banking if the salaries get any lower. When you work out how many hours junior associates are working - they're probably getting little more than minimum wage...

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  • Yeah, reduce NQ salaries by 20% or so so it takes young lawyers even longer to pay off the ever increasing level of debt they've incurred by the time they've qualified to put themselves through university and law school.
    Edwards Gibson, I'm never coming to you when I want a job. You'll no doubt tell a potential employer to offer me less than they might otherwise have done!

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  • I'm very confused, how does cutting salaries for NQs in the City halt a jobs exodus to the regions. Surely, it increases it?
    From a client's perspective (and frankly when I was in PP), the thing that shocks me is not the salaries for NQs it's their charge out rates. Those charge out rates are set by the partners. If they want to see work flow in from the regions, they should cut the charge out rates....

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  • "City" law is in for a very rude awakening over the next few years, as are professional services companies generally, caught in a pincer of accelerating technological change, globalisation, offshoring, outsourcing and consolidation.
    IT is going to enable ever more processisation and automation, and make physical location ever less important (video conferencing is on the verge of becoming both far more common and far more effective, artificial intelligence will soon reach the point of being able to actually read text and draft documents).
    Globalisation is going to flatten the industry, forcing wages in the UK and places like India much closer together.
    Outsourcing, offshoring and use of support offices in low cost centres will all continue to grow as firms which fail to utilise them will be placed in a worsening competitive position. Maximising the use of these opportunities will also drive consolidation, which will in turn drive further outsourcing, offshoring and use of support offices.
    The ultimate effect of these trends will be far fewer lawyers working in London, and for lower salaries. Things wont look radically different in two years times but they will in 10, and in 20 they will be unrecognisable.

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  • Is this a joke? It is truely the first time I have ever heard someone suggest cutting the pay will keep people in the city... Surely lower pay will make being a in-house laweyer more attractive?

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  • If clients object to paying NQ salaries you wonder how they feel about the fees charged by recruiters for placing job ads and forwarding emails.

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  • @Paul in Sheffield: you've missed the point. It's not the NQs who will move to the regions, it's the NQ JOBS. No firm is short of NQ applicants.
    @JohnintheCity Many clients don't like paying a lot for NQ work because they don't rate NQ experience and expertises (understandably). The same doesn't apply for more senior lawyers. This isn't about fairness, it's about responding to what clients say. (Or more accurately, what Edwards Gibson say they say).

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