Junior lawyers are still some of the highest paid graduates, despite the recent pay freezes and cuts announced by top commercial law firms.
According to the Association of Graduate Recruiters Summer Survey, published on 6 July, the median starting salary for law firms is £37,000, while those working at investment banks or fund managers are paid £36,000.
Trainees due to qualify at US firm Weil Gotshal & Manges in September will, for instance, earn £85,000, despite having their pay cut by 5.6 per cent.
Jonathan Wood, graduate recruitment partner at Weil, said: “The US model is slightly different to the magic circle, so I suspect we’ll always pay ahead of them. I don’t sense that just because economic conditions have changed we need to reposition ourselves in terms of pay.”
Weil is one of the most generous employers in London in terms of salaries, but its decision to reduce newly-qualifieds’ (NQ) pay will create a bigger gap between it and rival New York firm Cleary Gottlieb Steen & Hamilton, which is leaving its NQ salary unchanged at £92,000, while at £96,970 Latham & Watkins’ NQ salary is believed to be the highest in London.
TheLawyer.com revealed Weil’s new NQ rate last Monday (6 July), sparking a heated debate among readers.
One in-house lawyer at a FSTE100 company, with eight years’ post-qualification experience, revealed she only took home £85,000 too.
She posted: “Surely you cannot seriously argue that a newly qualified lawyer at any firm, and regardless of ‘potential’ ability (except maybe those few NQs who have qualified as lawyers following years of business experience), is actually worth £85,000?”
But some readers agreed with the high salaries, with many admitting it was known that US firms expected more from their staff.
One poster wrote: “If you think of the hours that most of them were doing to get it (at least up until last year) then I would say ‘no thanks’. I think there’s still a difference between the demands of US clients compared to UK firms in terms of how immediate they want a response.”
This thought was echoed by one magic circle NQ, who said he did not apply to US firms while at university because he thought the “fat paycheck” was not worth “signing your life away” for.
He added: “I’ve got a friend who works at a big US firm and it only works out that he gets around £500 more than me in his pay packet each month, after all the tax he has to pay. He literally doesn’t get to see daylight to spend any of it and I just really wouldn’t want that kind of life.”
Weil’s move comes after the magic circle announced it too will be putting the brakes on several years of salary hikes.
Allen & Overy (A&O) announced it will be cutting NQ salaries by more than 7 per cent. Trainees qualifying with the firm in September 2009 will now receive a salary of £60,000, down from £65,000 the previous year.
Freshfields Bruckhaus Deringer also reversed its associate salary bands, with NQ salaries dropping from £66,000 to £59,000.
NQ pay at Linklaters has been scaled back by 7.6 per cent, from £66,600 to £61,500. September qualifiers at Clifford Chance, meanwhile, will now be paid 11 per cent less, taking home £59,000 rather than the £66,000 they were paid the previous year.
But with jobs in the market looking increasingly shaky, one poster on TheLawyer.com hit the nail on the head when he wrote: “I think anyone who’s newly qualified is lucky enough to have a job, let alone an excessive salary.”