This year a first-year qualified lawyer at Milbank Tweed Hadley & McCloy’s London office will earn £10,000 more than the Prime Minister.
While Tony Blair’s pay packet is £107,149, the US firm’s associate’s £28,600 end-of-year bonus brings their annual slice of the cake up to £117,860.
That salary is understood to be equivalent to the pay of a young partner at Eversheds.
But Clifford Chance Rogers & Wells is breaking ranks with other New York law firms and refusing to give equal US associate bonuses to London lawyers.
Of the 14 New York firms with London offices that have announced massive first-year lawyer bonuses, Clifford Chance is the only one that has decided not to give UK-qualified associates the same bumper packages.
In line with rivals, it will give first-year US lawyers end-of-year bonuses of $40,000 (£27,970). But in London, first-year associates are only eligible for bonuses of up to 10 per cent of their salary, which means a maximum of £5,000.
US firms White & Case, Weil Gotshal & Manges and Dewey Ballantine are yet to announce whether they will duplicate the bonuses here, but all of the other New York firms are awarding them to both US and UK lawyers.
White & Case and Weil Gotshal are unlikely to match the bonuses in London because they do not pay their UK lawyers at New York rates like their rivals do. Both have traditionally mirrored the magic circle in their pay scales.
Dewey Ballantine, on the other hand, pays London lawyers at New York rates, but by holding off the decision on UK bonuses for assistants it, too, may decide to buck the trend.
London managing partner Fred Gander says: “We pay everyone New York rates over here, but for the time being we’ve decided not to pass on the bonuses in the UK. We’re continuing to watch the markets here and see what the other US firms are doing.
“Our view was that it was purely driven by the recruiting market in New York, so we decided not to pass it on – we’re still deliberating at this time.”
Though the bonuses at Skadden Arps Slate Meagher & Flom are smaller – a sum of $20,000 (£13,900) – they go alongside a basic salary of $140,000 (£97,222) so still give a total package of $160,000 (£110,000).
In New York the salary war is kicking off now because summer associates are making decisions about which firms to join. The shortage of lawyers in the market means ever-bigger remuneration packages are being used to attract the brightest lawyers.
In London, Clifford Chance and Slaughter and May have upped their salaries in line with rivals Linklaters & Alliance and Allen & Overy (The Lawyer, 30 October). Newly qualified lawyers at Clifford Chance go up from £42,000 to £43,500, six-month qualifieds go up to £45,000, one-year qualifieds up to £50,000 and 18-month qualifieds to £54,000.
At Slaughter and May, across-the-board increases start with newly qualified salaries rising from £42,000 to £46,000, trainees go up from £25,000 to £27,500, one-year qualifieds from £46,000 to £55,000, two-year qualifieds from £54,000 to £63,000, and three-year qualifieds from £62,000 to £71,000.