Possibility of wage war looms as rivals scoff at claims that euro conversion necessitated pay increases
German firm Hengeler Mueller and Linklaters Oppenhoff & Rädler have increased their salaries for first year graduates, prompting speculation over the success of their recruitment strategies.
Hengeler has increased its salary for newly-qualifieds from DM150,000 (£47,400) to ĸ0,000 (£49,450), while Linklaters has made the increase from DM150,000 to ĸ3,000 (£51,300). The straight conversion of Deutschmarks into euros would have resulted in a paypacket of ķ6,690 (£49,300).
The move has sparked fears of a renewed salary war in Germany.
However, Hengeler recruitment partner Joachim Rosengarten said that the move is not meant as a sign to the market that it is entering a salary war. He instead blames the currency conversion from Deutsch-marks into euros.
“When we converted the salary from Deutschmarks to euros, we ended up with an odd figure which had to be either rounded up or rounded down. We decided to round up”
Joachim Rosengarten, Hengeler Mueller
“There’s been a slight increase, but I don’t think it will start a war,” he stated. “When we converted the salary from Deutschmarks to euros, we ended up with an odd figure which had to be either rounded up or rounded down. We decided to round up, but I guess other law firms will be doing the same thing.”
However, a partner at a rival German firm said he thought blaming the currency change was a decoy to detract from the fact that the firm was having difficulty recruiting the top graduates.
“There’s no need to round the figure up to the nearest 5,000,” he said. “We’ve just rounded ours up to the nearest 1,000.
“It’s likely that Hengeler is feeling the concern that graduates have about a purely domestic firm.”
He also pointed out that Linklaters has had to lengthen its partnership track, which might put off applicants. “Before, the partnership track was five or six years, whereas now the firm has adopted the UK model, which is much longer,” he explained.
Last year German law firms were teetering on the brink of a salary war after following in the footsteps of UK and US firms, which saw salaries rocket.
A survey published by German legal magazine Juve claimed that first year graduates were then attracting up to DM195,000 (£61,600) including bon-uses.
Cleary Gottlieb Steen & Hamilton was the highest payer, offering graduates DM170,000 (£53,700) plus a profit-related bonus.
Allen & Overy, Baker & McKenzie, BBLP Beiten Burkhardt Mittl & Wegener, Clifford Chance Pünder, Freshfields Bruckhaus Deringer, Hengeler and Linklaters were all paying DM150,000 (£47,400).