Pay on the rise again at magic circle firms

Three magic circle firms bring warm glow to junior ranks by ending salary freeze

Summer may be taking a while to arrive, but salary global warming is well under way in the magic circle. After several years of freeze, associates are basking in the warm glow of a boosted pay packet.

Many firms are yet to publish salary bands for 2014/15, but for those that have – Allen & Overy (A&O), Freshfields Bruckhaus Deringer and Hogan Lovells – things are looking bright.  

Leading the pay pack is Freshfields, which melted its five-year freeze on trainee pay and one-year merit-based associate pay this year. It’s been a roller-coaster for the lower ranks, whose career path was overhauled last year to a ‘career milestones’ (CM) system.

Clearly bored with the traditional 1, 2, 3-year PQE system, Freshfields adopted a merit-based structure aimed at rewarding top performers. Lawyers now fall into CM bands that equate roughly to PQE 2, 4 and 6.

Those in the CM foundation stage will receive between £67,500 and £77,500 for 2014/15, up from £65,000 and £72,500 in 2013/14. There have been similar rises for those further up the ladder (see table).

They may have been shuffling along on the same pay for two years, but Freshfields’ associates can’t complain. The firm is way ahead of its magic circle rivals.

Its closest rival was Linklaters, which lifted its own pay freeze in 2012 and has raised salaries each year for PQE 1, 2 and 3. Linklaters’ NQs would have got even, with salaries of £65,000 in 2012/13, but Freshfields has now stormed ahead.

A&O also decided its lawyers were looking chilly at the end of last year compared with rivals’. It made a quick U-turn on its decision to freeze NQ and 1-3 PQE pay in the financial year 2013/14. If it joins the rest of the pack, the magic circle will be enjoying summer in the sun.

Magic circle salaries 2014/15            
             

Firm

NQ

1 PQE

2 PQE

3 PQE

CM2 (4 PQE)

CM3 (6 PQE)

Freshfields Bruckhaus Deringer*

£67,500-£77,500

N/A

£87,700-£100,000

N/A

£107,500-£115,000

£120,000-£135,000

Linklaters

£65,000

£70,500

£82,000

£93,500

Slaughter and May

£65,000

£70,000

£79,000

£89,000

Magic circle salaries 2013/14

           

Firm

NQ

1 PQE

2 PQE

3 PQE

CM2 (4 PQE)

CM3 (6 PQE)

Allen & Overy

£64,000

£69,500

£78,500

£89,000

Clifford Chance

£63,500

£69,500

£78,200

£87,800

Freshfields Bruckhaus Deringer*

£65,000-£72,500

N/A

£80,000-£92,500

N/A

£100,000-£107,500

£115,000

Linklaters

£64,000

£69,500

£78,250

£89,000

Slaughter and May

£63,000

£69,500

£78,000

£87,500

Magic circle salaries 2012/13

           

Firm

NQ

1 PQE

2 PQE

3 PQE

CM2 (4 PQE)

CM3 (6 PQE)

Allen & Overy

£61,500

£68,500

£74,500

£74,500

Clifford Chance

£61,500

£69,000

£76,300

£87,000

Freshfields Bruckhaus Deringer

£65,000-£72,000

N/A

£80,000-£92,500

£100,000-£107,500

£115,000

Linklaters

£61,500

£69,000

£76,000

£88,000

Slaughter and May

£61,500

£69,000

£76,500

£86,000