EJ Legal Salaries & Market Information

Private Practice

Braving the Conditions

Whilst we are not out of the woods by any means, and a double dip seems almost inevitable, more and more law firms are coming to terms with this challenging new world. As a result, after a slow couple of years, the legal recruitment market appears to be moving again.

Tough and unpopular decisions such as large scale redundancies have become much less frequent amongst leading firms, with only a few examples of job cuts on account of clients seeking lower rates offered by firms’ regional offices. Having exercised due caution in recent years, and staying put more often than not, some of the most ambitious candidates are back in the driving seat, and making career-enhancing moves. As departments have generally become leaner in the recent past, firms are now keen to replace these leavers in most instances.

Candidate demand has increased in almost all practice areas as firms’ focus on client development pays dividends and a sustained rise in workload necessitates additional headcount. Partners are still adopting a somewhat measured and strategic approach, however, with little desire to compromise on their ideal candidate profile. The year’s exciting developments in the private practice market have also included game-changing mergers between insurance heavyweights, concerted investment in London’s legal market by leading US firms, and private practice and corporates exploring advantages to be gained by the advent of the Legal Services Act.

Analysis

In terms of salary, the divide between the US firms and top City firms seems to be widening. Similarly, the top City firms are edging away from the chasing pack of medium-sized and small City firms. NQ salaries have gone up by an average of about 2%across the board, with US firms leading the way with increases in the order of 6%. NQs at top City firms have seen a modest increase of 1.5%on average, whilst their counter parts at small City firms are 3% better off than in 2010.

In general, medium-sized City firms and top regional firms seem to still be feeling the squeeze, with associate-level salaries remaining at the same level as last year, and solicitors at topWest End firms appear to be suffering more than most with an average decrease of 2%across the 1-5PQE level. Pay rises at small City firms have been somewhat more generous, with increases throughout the mid and senior level of up to 5%on average, as the smaller firms close the gap on the medium sized outfits in the City. US firms salaries have generally gone up. Apart from the solid increase at NQ level, the largest raises have been at the more senior end, upward of 4PQE.

Whilst firms seem generally to be striving to retain and attract the best talent at NQ and senior level (4 and 5 PQEs are paid on average 3-5%more than last year), the 1, 2 and 3 PQE levels appear to have been neglected to a greater extent, as associates at this level are generally worse off than last year. That said, salaries at the top City firms have been more consistent. Salary drops in the order of 2.5%at NQ level, and averaging 6-8%from 1PQE upwards, give the impression that the top West End firms are struggling more than most.

Lawyers between 1 and 3 PQE seem to be amongst the most disgruntled as they feel their salary reviews have been less rewarding than they ought to be. There is a perception that firms are doing what it takes to attract and retain good NQs and senior lawyers, but not showing the same level of attention to the mid-level members of the team. As firms are increasingly adopting merit-based models, there appears to be a greater variance in pay between solicitors at the same PQE level in the same or comparable departments.