EJ Legal Salaries & Market Information

In House: Financial Services Salary Survey January 2014

2013 Trends

An uncompromising market

The job market remains challenging with few financial services firms having recruited extensively in 2013. Headcount is still difficult to obtain and securing approval to hire is becoming a frustrating process, resulting in hiring managers being under a lot of pressure to make sure the new recruits deliver. This has had a substantial impact on recruitment processes which have become lengthy and less predictable. Our clients are looking for skills that match the profile required perfectly and, having fought hard for the headcount, are less prepared to compromise.

The market remains unrelentingly tough for more senior candidates. In any case, in-house employers tend to prefer to recruit lawyers at a junior or mid-level but the lack of opportunity has been exacerbated by the fact that there has been an increasing trend for employers to bring in more junior solicitors for positions which, in a better market, might have been designed for more senior people.

Due to global financial instability, there is an increasingly sceptical view of bonuses. Candidates (especially from private practice) are, therefore, more reluctant to move and/or compromise on salaries due to the unpredictability.

Encouragingly, although the majority of new roles released onto the market in 2013 remain replacement roles, as the market landscape has evolved in the wake of the financial crisis, new opportunities have arisen. The regulations coming into force have impacted on the entire financial services sector and, in particular, the asset management and banking industry has had to adapt to these new requirements. We examine the particularly buoyant areas below.

The structured finance revival

Whilst investor appetite in European products has picked up, a higher demand for debt capital markets and structured finance lawyers has emerged over the last year, with a particular interest for structured debt finance, bond restructurings, as well as securitisation experience. However, structured finance lawyers who were highly sought after prior to 2008 have had to reconsider their salary expectations in a rather saturated market. Clients are spoilt for choice with candidates from top firms who have extensive knowledge of a very niche industry.

Buoyant sectors and skills in demand

The asset management sector, and the asset management divisions of banks, have again been recruiting steadily and tend to generate a healthy pool of roles across various areas such as commercial, funds, and derivatives work. Admittedly, as above, roles released are typically at the junior to mid-level end with fewer job specifications including managerial responsibilities.

Regulatory pressure on the financial services sector means lawyers with direct in-house regulatory experience are sought after, particularly those with AIFMD, MiFID and EMIR knowledge. Due to the dearth of regulatory lawyers in the market with specific technical knowledge, firms are having to look to lawyers with either more general FS regulatory experience or those who come from a products background.

Collateral services, custody, and clearing have all seen a great deal of growth over the past year and so lawyers with relevant experience have had opportunities to move into exciting new areas in banks, exchanges, and the asset management industry. We have even seen an increasing demand from corporate broking to integrate lawyers into their business— although not necessarily in an in-house function— in reaction to these changes. These are the types of opportunities that we have not seen since pre-2008.

ISDA Negotiators are still in demand and are paid well but for how long? With plans for leading institutions to outsource their teams to offshore locations, the future of UK ISDA Negotiation remains uncertain. Negotiators that have a diverse pool of experience and can turn their hand to prime brokerage are in greater demand.

Clients continue to turn to contractors to overcome increased activity, assist with new standalone projects, and counteract head count restrictions. The appetite for temporary work has improved with lawyers opting for a better work-life balance whilst still looking for challenging roles.

Compensation and bitter taste bonuses

Overall, compensation in the financial services sector has risen. Lawyers who have stayed in their current roles may have seen minimal increases in their base salaries and bonuses remain consistent with the past few years.

The few in-house lawyers who received substantial bonuses last year are often the ones who are looking to move. Overworked key members of under-resourced teams, receiving little support from their managers, are left with the difficult choice of whether to move for a similar salary or stay in a dysfunctional team.

As the job market picks up and candidates have more than one option to consider, employers have to be more competitive with their offers – the days are almost behind us where companies can rely on the adage: “they should feel lucky to have a job!”

Investment Banking

The first half of 2013 saw a definite increase in the number of roles for lawyers released in the investment banking sector compared to previous years. The second half of 2013 was less buoyant as legal teams consolidated and focused on business as usual, as well as identifying where the key challenges lie for the year ahead.

With an increase in regulatory changes and the need for these to be implemented quickly, the demand for regulatory specialists has rapidly outstripped supply. Litigators with FS experience, or lawyers with contentious regulatory experience, have also been hot in demand with many banks facing litigation. Some banks have set up specialist teams to deal with mis-selling complaints, often resourced by skilled commercial litigators who are willing to meet tight deadlines and, in return, earn competitive contract rates. Trading and derivatives continue to be highly sought after skillsets.

 

PQE

Average Salary Range

Daily Contract Rate

10+

£120k+

£500-£600

8-10

£100k-£180k

£450-£550

6-8

£90k-£130k

£400-£500

4-6

£75k-£110k

£350-£450

2-4

£70k-£95k

£300-£400

0-2

£55k-£80k

£180-£350

ISDA Negotiator

£45k-£110k

£200-£450

Paralegal

£35k-£50k

£150-£200

In terms of bonuses, the banking sector still suffers from having been at the heart of the economic crisis over five years ago now and this has had varying implications for all. Bail-outs, recapitalisations, responses to incoming regulations, political conscience, have all contributed to the reasons for the spread of bonuses to be found within different banks. On average, 20-30% is still the most reliable indicator for lawyers at a junior to mid-level. More senior bonuses have ranged from 20% to as high as 100% but, unfortunately, there are still very many who, at some institutions, will not have received a bonus at all.

Asset Management

The first quarter was very slow and ‘stop/start’ but the rest of the year has been more steady and an expanding range of institutions are recruiting. Skillsets in demand have been structured products / funds, funds administration, custody, FS regulatory, and alternative funds. General funds lawyers with retail products experience (including off shore funds experience) and solid regulatory knowledge are also highly sought after.

Asset Management

PQE

Average Salary Range

Daily Contract Rate

10+

£100k-£170k

£450-£600+

8-10

£90k-£135k

£400-£550

6-8

£85k-£110k

£375-£500

4-6

£80k-£110k

£350-£450

2-4

£70k-£90k

£300-£375

0-2

£55k-£75k

£150-£300

Paralegal

£30k-£45k

£130-£200

Bonuses typically sit at 10-40% for legal counsel and can reach 60% for senior legal counsel and Head of Legal roles.

Insurance

Despite the fact that the insurance sector has emerged relatively unscathed from the crisis, the market has still been generally conservative in its hiring outlook. Insurers, too, are being affected by the incoming regulations and the need to reduce costs where possible. Where those hires have been made, remuneration and bonus levels remain strong.

PQE

Average Salary Range

Daily Contract Rate

10+

£120k-£175k

£450-£550

8-10

£95k-£120k

£375-£450

6-8

£85k-£105k

£350-£400

4-6

£72k-£90k

£300-£375

2-4

£55k-£78k

£250-£320

0-2

£50k-£65k

£200-£275

Paralegal

£25k-£40k

£120-£160

Bonus range typically sits between 10-40%, and up to 50% at Head of Legal level.

The Outlook for 2014

The economic forecast for this year looks positive as business and consumer confidence continues to rise and output is expected to pass its pre-recession peak in the second half of the year. However, whilst unemployment falls rapidly, we do not predict the market to be booming but an increase in recruitment activity seems likely. Should the predictions that inflation will fall and wages increase ring true, then we should all feel some easing on the wallet.

To discuss this update or your personal recruitment requirements in detail please contact the legal team at info@ejgroup.co.uk or call on +44 (0) 207 400 2000