Biglaw Pay Raise Watch: Weil and Cleary to 180, Latham to 190!
Yes, it’s true — we swear! This is not just another wild rumor. You can take this one to the bank!
The Bank of London, that is. From TheLawyer.com, a U.K.-based website:
Weil Gotshal & Manges’ London associates now earn more than their counterparts in New York after a 20 per cent pay hike in London.The US-headquartered firm is now offering some of the most generous pay packets in the City with newly qualifieds (NQs) now receiving £90,000, representing a 20 per cent jump from £75,000. First-year associates who qualified in September 2006 will receive an average of £95,000.
If you enter the figure of £90,000 into this currency converter, you get the sum of $178,441, based on the current exchange rate. And Weil isn’t even the most high-paying firm in the city:
This puts Weil towards the top of the market in terms of US firms in London. Latham & Watkins still offers NQs the most, with £96,000, and Cleary Gottlieb Steen & Hamilton offers them £92,000.
Latham’s salary of £96,000 for new lawyers translates into $190,341. Cleary’s £92,000 comes out to $182,411.
So should U.S. associates pack it all in and jump across the pond? Or does London’s high cost of living, plus the crappy food — Gordon Ramsay and good Indian joints notwithstanding — make the move not worth it?
Feel free to discuss associate compensation in London in the comments. This will constitute the open thread on London and the U.K. that some of you have been asking for. Thanks!
Update: This is kind of random, but click here for Google Maps directions from New York to London. We especially like step #21.
Further Update: A reader notes that if you get recruited by your firm’s New York office for a London position, you could do even better. More details after the jump.
Weil Gotshal ups NQ pay to £90k [TheLawyer.com]
Weil Gotshal Newly Qualified Lawyers Earning A Bundle More [LawFuel]
Universal Currency Converter [XE.com]
Here’s what one reader has to add:
Certain law firms (such as Clifford Chance, Cleary, Simpson Thacher, Shearman, but not limited to.) are looking for associates to join their foreign offices, and to encourage or lure law students to make the step (quite a big one too, since it is accross the big pond), they are offering interesting salary packages. The base salary is $ 160.000 (same as in NY, even though the position is abroad - the reason is that the persons are recruited by the NY office and are under NY payroll, even though they actually work in Paris, London or Rome, and never ever worked in the NY office), AND on top of the 160k salary, they get an “overseas compensation package” which is above $50.000 (the exact amount depends on the firm), which means that the TOTAL salary (before bonus) is well over $200.000, and yes, this is for entry-level, first year positions !The only “catch” is that the persons need to be recruited by the New York office for the position abroad (which means that the NY office must have a need to hire sone U.S. lawyers to expand a foreign office), otherwise, if you are hired by the local office, you “only” get paid the local salary…
“Only” the local salary of $180,000 to $190,000, as discussed above…. Oh the grinding poverty!
Update: / Correction: Another tipster advises that the “catch” doesn’t apply to U.K. firms who hire U.S. lawyers in London. These firms — e.g., Clifford Chance, Linklaters, Allen & Overy, Freshfields, etc. — will recruit American lawyers directly, and pay them on the U.S. scale (with a COLA thrown in for good measure).
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First
London is much more expensive than New York, and it isn't fair to compare based on the exchange rate, as what we really need to know is the purchasing power parity between the pound and the dollar, which I haven't the time to find out. Suffice it to say that a pre-made sandwich costs something like $12 in London right now, and that's bloody expensive.
London has pretty good food these days.
Weil has a firm-wide salary policy in place. Does it plan to continue this policy and raise to $180K in all offices?
. . . but people in cities outside of NY keep telling me that COL doesn't matter.
I think the cost of living is exaggerated. I was in London a short while ago and there were plenty of sandwich shops in the business district that made sandwiches for about 7 dollars. Other everyday items were about the same as in NY -- but i don't know about rent
Any word on whether Skadden/Simpson/Cravath have matched in London?
Lat-
Your headline is wildly off the mark; there is no basis for saying that the London market is connected to the New York market, so there's no basis for the view that these firms have raised at all. So who cares?
Coincidence that this news breaks the same day that Mercer's annual list rates London the 2nd most expensive city to live in? NYC is ranked 15th.
http://www.mercerhr.com/knowledgecenter/reportsummary.jhtml/dynamic/idContent/1095320;jsessionid=D0ZD0QD2HAPUWCTGOUGCIIQKMZ0QUJLW
OK - I held my tongue on this site but what the hell!!!??? Why should New York associates ever be paid less than London associates. Has anyone ever worked with foreign associates on a complex transaction? I have and let me tell you they weren't up to it. Not to mention the considerable difference in education.
Listen up partners, New York either is the world's financial center or it is not. Decide quickly.
And don't tell me what a fucking sandwich costs in London!!!!!!!!!
You guys are forgetting the COL adjustments that overseas biglawkids already get? I think in HK its 75k or so on top of everything else. So first years probably are making 265. Oh, did you forget the 15% flat tax rate?
Right on!
could we get a webcast of today's jenner associates meeting?
1:02, I think that was kind of the point of the headline -- a joke.
Also: A misleading headline? In a self-described tabloid? Heaven forfend!
That was an awesome headline. I got really excited- started counting my raise- then go to the part about London. Nice.
But there's a huge-ass photo of the London Bridge at the top of the page. How could anyone be misled?
No really ... London has a 15% flat tax? Is that a city tax or is that the total percentage of the tax burden in the UK?
I'll take that over universal healthcare any day (oh wait, the UK has that too).
At least one of these firms has a London office (and probably two), and while I don't know what they pay there, none of these firms are on the new 160 payscale stateside:
Continuing CA List of Shame:
1) Thelen Reid
2) Perkins Coie
3) Bryan Cave
4) Baker & McKenzie
5) Seyfarth Shaw
6) Foley Lardner
7) Greenberg Traurig
8) Holland & Knight
9) Nixon Peabody
Tower Bridge. If it was the London Bridge, it would imply that Lake Havasu City, Arizona is now the top-paying market.
WAR BEGINS . . .
with a 'W'.
I felt like everything in London was priced as if it were in dollars, but it was in pounds, so you paid twice as much (well, 1.8 times as much last time I was there). So I think the London folks are probably getting hosed, especially considering apartment prices and what not.
Cleary has a firm lock-step compensation system that is an integral part of the corporate culture. I would be shocked if the US offices don't match the London salaries.
SPEEDOS!!!
As reported in CNN Money:
World's most expensive cities 2007
1. Moscow
2. London
3. Seoul
4. Tokyo
5. Hong Kong
6. Copenhagen
7. Geneva
8. Osaka
9. Zurich
10. Oslo
11. Milan
12. St. Petersburg
13. Paris
14. Singapore
15. New York City
16. Dublin
17. Tel Aviv
18. Rome
19. Vienna
20. Beijing
this is bullshit. raise in ny for goodness sake
$145k in Atlanta
1:40 -- what's wrong, can't deal with reality, but still feel the need to complain? I guess it's the cognitive dissonance due to their feeling that NY is the "most important place in the universe."
Hang on . . . is "newly qualified" the same as a first year associate? How long does it take, after graduating from law school, for a British lawyer to get "qualified?"
1:23 - that was awesome.
1:39 - I imagine if you confined NYC to Manhattan then it'd get a bump up a few notches.
Wow, St. Petersburg at #12 - that has to bode well for Tampa, right?
I'm told that London Xchange IPOs are through through roof due to desire to avoid SOX, which would apply to listings on the NYSE. If memory serves, there was a highly publicized suicide earlier this year by a promising London associate at a top firm, and the press on it made much of his burn out level due to overwork.
To be a solicitor in England according to wikipedia, you need an undergraduate law degree- I think 3 years- and presumably free. Then you have a one year solicitors course, followed by a two year apprenticeship. I assume you get paid something during that apprenticeship. So I am guessing that you come out of the system with almost no debt, and in 6 years as opposed to 7 in the U.S.
If I were looking for associates ready to produce to earn the 200K, I would want those that had done apprenticeships. But if I wanted future partners that were able to put together complex solutions involving multiple disciplines, I would prefer liberally educated top American students.
2:04,
"Wow, St. Petersburg at #12 - that has to bode well for Tampa, right?"
This must be sarcasm...
as a note, that cnn list is for the CoL for ex-patriates living in the city, not the CoL for the city itself. don't know what difference that makes, but in the interest of accuracy . . .
Any update on whether Weil has matched in its NY office?
So does that mean they're comparing americans in foreign cities to foreigners in NYC?
i made 32k at a nonprofit pre-law school and lived in manhattan and did all right. no savings, no fun vacations, but ate, went out, etc. i have also lived in london; 17/18k pounds a year would not allow me anywhere close to the same lifestyle as in nyc. why is this being debated? london is more expensive in every way.
1:28:
"Cleary has a firm lock-step compensation system that is an integral part of the corporate culture. I would be shocked if the US offices don't match the London salaries."
This is ridiculous. Not even getting to *why* they would do it, HOW would any US firm "match" pay in a foreign country? One of the salaries would have to continually fluctuate with the exchange rate.
No one's matching London.
I'm a US associate working for a magic circle firm in London and it's true: London is more expensive in every way. Of course, my dollar denominated student/revolving debts are my biggest expense, so in that regard, the exchange rate doesn't matter so much. Also, who's spending 100% of their salary? I'm putting what I can away in my 401k and other investments, so cost of living is a non-issue. At least that's what I tell myself when I go to a $25 movie.
We do also get a very generous cost of living adjustment and, as I understand it, work fewer hours. I love New York, was educated there, and get back every chance I get. I just wanted to go on the record, however, and point out that US associates in London get a pretty sweet deal. Starting salary before bonus of over $200,000. The difference in salary alone is the equivalent of a free apartment.
Skadden London handles all of its own incoming permanent hiring (there are some revolving 2 year associate positions as well). Incoming US law associates get the normal $160,000 base plus a $57,000 cost of living adjustment. Almost all US law associates (citywide, not Skadden-specific) get paid in dollars - the figures you're quoting in your headline are for UK law associates (most firms have two different pay scales).
NYC may raise one more time before this all comes crashing down.
NYC raises are based on trans. work, which has been based on sweet hedge-fund work. As i-rates increase and risk premiums grow again (see: The Coming Credit Meltdown, http://online.wsj.com/article/SB118212541231038534.html?mod=todays_us_opinion - link requires reg.) this work will dry up. Give it about 6- 9 months.
Those hedge funds that survive will then be taxed and regulated to death by President H. R. Clinton.
So, we can all enjoy this while it lasts.
Rising 2L's may be on the tail end of the peak at this summer's OCI.
Those going to LS in the fall are most at risk.
Those getting ready to apply to LS should seriously think twice, if they have a good job now.
NY offices to raise to $180...just wait...
Are there any actual lawyers on this board? Are you complete morons then?
Cost of living has nothing to do with salary. Rinse and repeat.
2:34 (the second) - You are a dumbass. Did you actually think people were advocating to the penny matching? Yes, we all think firms should hire someone to watch the markets to see what the GBP is doing so they can raise or lower, as the case may be, our salaries. Of course, any changes will be retroactive to the dawn of time and classes beyond 2000 will be handled on an individual basis. Maybe we should start a thread debating whether it should really be the EUR we peg our salaries to. Please stop posting.
I miss Ralbylove.
Portsmouth to $350!
1:49 -- How about it just being motivated by self-interest? Moron.
Most (all?) big American firms pay their American associates in certain over-seas offices (London, HK, etc) HUGE COL adjustments. A friend of mine who started at S/S last fall was offered $145 for NY (this was before the jump to 160) or $210 for London. He went to NY. His thinking was London is (in his estimation) 1.5 times as expensive at NYC, and 210 is short of 1.5 x 145 (there were, of course, other considerations).
This shows U.S. educated associates are significantly more valuable to firms than UK educated associates. They are willing to pay a significant premium to bring over U.S. grads.
One way to look at this is that wall street's recruitment pool is much larger than the recruitment pool for the City of London, although their needs for top attorneys are probably pretty similar. If the market were perfectly smooth, enough U.S. associates would move over their and the premium would be small.
Pissed Off notes that the work coming out of London based attorneys is sub-par, but this is exactly why these firms must pay more to attract top U.S. associates.
I've got very large balls.
p.s. and my firm is at 160k
The discrepancy in compensation is to account for the drawback of having to live in a worthless country whose most meaningful contributions to the world have been colonialism and bad dental hygeine.
how is "bad dental hygeine (sic)" a meaningful contribution to the world?
Raise in NY already - 200k, put the other markets to bed.
4:19 - an interesting comment, since arguably you would not be able to post said comment from your office where you work within a common law legal system, had the country you lambast not colonized the land underneath your ass.
I'd move to London for the football (soccer) and beer alone....
New List of Shame:
All firms outside London.
2:22 - the ex-patriate issue makes a difference in London (and certain other places) because ex-patriates have a different tax structure than locals. In the case of the UK, ex-patriates have a beneficial tax structure, IIRC, so my guess is that it lowers London on COL chart more than it otherwise should.
There is no question that London's COL is much more expensive than the US (even NYC). I traveled and worked in London on and off for quite a while, and speak from experience. My rule of thumb for comparing costs was to flip the currency sign so that, for example, the new salary of £90,000 would, in my experience, have the buying power in the US equivalent to $90,000. By this standard, the UK associates are paid far less than us in the US.
But, before the morons out there that prefer ad hominem arguments speak up, I would be glad if I were wrong and suddenly we see another round of salary increases.
3:24, nice comeback...
3:42, you're an idiot. Obviously you need to pay US associates more to live in London, since there is no reason for them to move if they can have the same work and the same cost of living in New York. English associates do not get the $60,000 cost of living adjustment that U.S. associates get (and trust me, you need it to have the same standard of living in London as in NYC).
Next, as 3:12 points out, salaries in London have nothing to do with cost of living. US firms find it difficult to hire UK associates because there is a perception that the hours are longer than at UK firms (which is not necessarily true) and US firms don't make UK associates partner (which is definitely true).
US firms used to pay much higher salaries to UK associates than UK firms, but because of the collapse of the dollar the differences have become less significant and it has become harder and harder for US firms to hire UK associates. That's why Weil has decided to make this big splash.
Making comparisons between US associates and UK associates in terms of work product is pointless. You need US lawyers to advise on US law and English lawyers to advise on English law. And if you think you can just blithely go in and advise on English law, I have two words for you: financial assistance.
Why is "fergie" in the picture metadata?
What is metadata? That sounds like nerdy-talk.
5:25 - I'm glad someone finally put forth a cogent agrument for this increase. As a US associate, I am not concerned about "matching" the new UK associate salaries so much as I am ensuring that New York associates are the highest paid in the legal world. Thank you for saying it is not about COL. (For the same reasons, I don't care if Atlanta or Birmingham match anyone. Who gives a shit except people in those places?)
As for your last comment about US/UK associate comparisons, the transactions I referred to above were UK transactions (with a US underwriter) and I was advising on US law. Unfortunately, I also had to explain much of the deal economics to my overseas colleagues, lest they be forced to resort to their "magic" to get the deals done.
"Cleary has a firm lock-step compensation system that is an integral part of the corporate culture. I would be shocked if the US offices don't match the London salaries."
Yeah, right, whatever. Tell that to the guys working at Cleary in Italy, where they are earning less than $90k.
The compensation system you are referring to is only valid in the US.
Maybe you can call the Cleary partners in Italy to explain to them their firm's "corporate culture" ?
6.00 : why sould NY associates be the highest paid in the legal world ? Last I checked, NY is not the center of the universe.
As for your lame reasoning (about some London associates that you worked with who were not that bright), anyone can point to numerous examples of NY associates who acted foolishly. Abovethelaw has so many examples of the stupid things some NY associates in top firms did, so what is your point ? Just because you knew your stuff for that particular deal does not mean you can generalize and suggest that all lawyers abroad are dumb. And there are lots of US lawyers abroad who studied in Ivy League schools too, you know.
If the top US firms believe that the London associates should earn more than their NY counterparts, this shows that maybe there is more to it than you think.
190,000 USD base is peanuts in London. Breathing there costs you about a grand a week. Stop bitching NY--everyone is sick of it Work for a hedge fund if you want to get paid.
6:22 - You miss my whole point. I don't care what you make in London and I don't care if you are competent or not (unless you work on my deals). All I care is that my firm pay me at least the same as they pay their London associates, and if they want NY to be the best market for legal transactional talent, they should pay up.
As to my less important point, how many transactions would it take to convince you 10? 20? 30? more? Just my observation/opinion within my firm (I thought that was well understood - I don't take a survey and I don't work on every deal in existence, obviously). And when I made the comparison, I was referring to UK trained lawyers, not US lawyers abroad. Oh and you should know that many abovethelaw posters are not actual lawyers yet and some may never be (I thought that too was well understood).
It is bad enough that Baltimore or wherever makes the same money as NY but to have London making more money is atrocious.
Pissed Off, you make some good points. I am a US associate and when I came over, I decided that it was financially worth my while to come over here as it would be easier to pay off my loans (since £1=$1.40 at that time). Now, at £1=$2, a junior US lawyer would have to be a fool to make such a decision.
I continue to think that generalizing about UK lawyers vs US lawyers is silly though, since both UK and US lawyers can be either brilliant or moronic. I do agree that quality varies more widely among English lawyers at Magic Circle firms than it does among US lawyers at top US firms, though. It only makes sense, since Magic Circle firms have many more lawyers than top US firms, while drawing on a much smaller talent pool.
Like I said, I'm pissed off. Don't mean to torch Anglo-American relations and all.
There are a lot of whiney bitches on this board...
6:44, NY is making more than London associates, since all the NY posters here seem to think COL matters in salary decisions by firms. Either it matters, and you're already getting paid more than they are, or it doesn't matter and there's no inherent reason for NYC to be paid more in base salary (they already make more due to bonuses) than the rest of the US offices.
Besides, I don't think firms that aren't exclusively in NYC really care where their talent goes to as long as it goes to their firm -- you can do so much of the transactional work from pretty much any office these days.
7:15 - you're off base. ny partners do care that they get the best talent in ny and work is not spread evenly across all u.s. offices (and ny offices work longer hours and i think the work is much better as compared to other offices).
col does not matter, as 5:25 and pissed off said - they seem to be saying ny should just pay more in base salary - bonuses are another story - if ny can bill more for its services (perhaps b/c the talent is better, works harder, etc) then they are right
that's a big if to have to prove here on this board, but i happen to agree and i think many lawyers and clients do as well
they seem to want ny to pay more to attract talent and be the best market (prestige factor) which i am all for because i live in ny
5:25, I don't get your point, I think you got it all wrong. All the more, with the current exchange rate, 1£ will go a long way to reimburse your debt in $. You just need to save £50.000 to pay back a $100.000 debt. And as Lat said in the article, the salaries in UK are almost £100.000. So I think it is the opposite : a junior US lawyer would be a fool not to consider London.
Pissed Off: obviously no one cares about NY being "the best market for legal transactional talent", in fact it this assertion has no longer true been true for a while. Just look at the salaries in other US states and you will see that the salaries in major firms are the same as in NY.
To 7:40:
New York will always lead the (U.S.) salary race. And other markets will only follow New York after the fact and then only if a New York firm with an office in that city raises the market. Salaries may be the same now but not for long and other market bonuses have never matched New York bonuses. That sounds like the best market for legal talent to me.
Spending power of the dollar in NY is roughly equivalent to that of the Pound in London. What you pay a dollar for in NY, you'll pay a pound for in London. Thats all, end of discussion.
Everyone needs to stop getting their panties in a twist about who has the best talent while comparing salaries adjusted for the exchange rate. The two are not connected. And those people saying NY should have the highest salaries, in dollars, on earth just because its NY: Get over yourselves. What, do you expect your salaries to rise and fall with the exchange rate just because NY should have the highest salary on earth? Ifyou go by purchasing power of the currency, in its home market, NY gets more than London. There, are you happy?
Spending power of the dollar in NY is roughly equivalent to that of the Pound in London. What you pay a dollar for in NY, you'll pay a pound for in London. Thats all, end of discussion.
Everyone needs to stop getting their panties in a twist about who has the best talent while comparing salaries adjusted for the exchange rate. The two are not connected. And those people saying NY should have the highest salaries, in dollars, on earth just because its NY: Get over yourselves. What, do you expect your salaries to rise and fall with the exchange rate just because NY should have the highest salary on earth? If you go by purchasing power of the currency, in its home market, NY gets more than London. There, are you happy?
YES!
But not really. NY to 190!
Sorry 7:36, I wasn't clear. You can still do a lot to pay back your debt in USD, but as a US associate you are not making GBP, you are making the standard NY rate in dollars (paid into your US bank account) plus $60k p.a. And you have to live in a city that is considerably more expensive than NYC. (UK associates, on the other hand, are paid in GBP).
When the exchange rate was better, the COLA was still about the same, so those of us making USD could do very well. But that's not true any more.
COL does not matter so forget spending power. If you choose to live in a more expensive city, so be it (just like the Atlanta/Chicago/etc folks tell the NY folks).
Let's compare all salaries in the same currency, OK? If you get 98k in pounds, I should damn well get 190k in dollars if we do the same work and bill out at the same exchange adjusted rate. And not because we should all be paid the same either.
8:01, you're ignoring what 5:25 tells us about market factors. Weil needs to pay £90K to attract UK associates in London, but doesn't need to pay any more than $160K in the US, because no one else is doing it yet.
US associates at Weil in London are already making more than £90K, but it doesn't have a long-term effect on any US associate's decision to go to NYC or London, because London is so much more expensive than New York and a US associate is ultimately losing out in the end by choosing to go to London.
Also, a UK associate in London can't just move to NYC to take advantage of the lower COL due to factors like not being admitted to the NY bar and not having a work permit. If a UK associate is hired by a NY firm, he or she is pretty fucking special, enough so that they will deal with all the red tape of getting him or her over to the US. By contrast, a law degree + evidence of breathing is pretty much enough to get a US citizen a work permit in the UK.
I know all about the trouble with work permits (I was being a smartass there but the COL agrument still applies).
As for what I ignored, I see your point about attracting UK lawyers in London but the supply curve will shift left again in NY as long as banks keep doing well and taking midlevels. The price for associates will rise - no worries.
I breathe and have a law degree, perhaps Weil will hire me in their London office.
7:48, you're an idiot. Do you not remember the salary increase to 125k? Yeah, that was led by California, and not NY.
Don't forget about the huge tax benefit for Americans during their first 2 years in London...could add another 30K to net salary.
Hey Assclown-
Yes, and I also remember what happened to Brobeck. That was VCs taking associates. Now it is banks. Do ya think the VCs are coming back and Cali will lead again? Is that you're bright idea? Maybe you're the idiot.
Is it true that some of the UK firms have pubs in their offices?
New CNN article on COL globally:
http://money.cnn.com/2007/06/15/pf/most_expensive_cities/index.htm?cnn=yes
So much for the "global pay" rumor that always pop up here and there. There is no global pay, there are huge discrepancies of salaries depending on the country you work in, even at leading US firms.
Pissed Off, since when is NY the "world's financial center" ? As someone said, the current exchange rate is £1=$2. This shows a lot about which country currently has a stronger economy and financial system. If NY was really the world's financial center, should't the exchange rate be the other way round ?
A bit late here, but how does one go about getting a job with a US firm in London? What office does one apply to? What areas of law should one be interested in?
Some of the arguments brought up to downplay the huge London salaries are really ridiculous.
Please, don't tell me that the alleged price of a sandwich you once bought or the alleged "bad food" are decisive factors in making a job decision. Come on, those are nothing more than pure cliches. You can get good/cheap food in Europe too, just as there is expensive and horrible food in NY too. Face it, that happens eveywhere in the world. Sheesh.
NY is not that cheap from what I recall, and the taxes or rent in NYC are quite steep too. Sure London is a little more expensive but hey there is a COL allowance which more than compensates the difference.
Then there are those who are obviously poor in maths and who claim that at "£1=$2, a junior US lawyer would have to be a fool to make such a decision" to go to London. Hello ? The exchange rate is in your favor, doh ! The COL allowance is in £, meaning you can save lots of money and pay back your law school debt quickly. Maybe the UK associates that you consider inferior could work their "magic" here and give you some maths tips.
The bottom line is that US associates in London get a pretty sweet deal. Starting salary before bonus of over $200,000 is nothing to sniff at.
I am a first year associate working in the Hong Kong office of a NYC Biglaw firm. I get the same base salary and bonus as I would in NYC, but I also get my apartment completely paid for, along with an additional 1K+/month as a cost of living adjustment. I would estimate that my effective annual salary for 2007(assuming a 35K bonus like last year) will be well over $250K (assume $12+K yearly COLA plus equivalent of $42K pretax a year housing allowance [$3500/month pre-tax cost of a $2000/month apartment in NYC]). I'm leaving out some other one-time payments and misc. perks.
And although I haven't gotten my tax bill yet, I won't have to pay NY state or NYC income tax, so I expect my total tax rate will be about 33% instead of 45% in NYC. I haven't done the math yet, but it seems like I will net tens of thousands of dollars more than I would have if I was working in NYC. I also don't have a car, usually walk to work, usually work late enough to bill my dinner to a client, and get enough frequent flyer miles (travelling business class on frequent DD/drafting session trips) that I rarely need to pay for airfare for personal travel. In fact, my personal expenses are so low that I have already paid 40K on my student loans this year and expect to pay off the remainder (60K) by the end of 2007 (4K/month plus my entire bonus), while still maxing out my 401K.
It feels pretty good until I look around at my non-American colleagues.
Non-US citizens do not need to pay any taxes to their home countries and only need to pay HK income tax, which is about 15% total. The US is apparently the only industrialized nation that taxes its citizens who live abroad. So my Canadian or Australian coworkers who are in the same class as me NET about $45K/year more than I do.
I don't even want to think about the non-American finance people here, e.g. the British I-bankers who make $1 million-plus a year and pay 15% income tax and 0% capital gains tax.
White Girls with Asian Guys
10:31, US associates are paid in dollars, not pounds, at standard New York rates. At most firms, the COLA is also paid in dollars. It helps, but not as much as it did when the dollar was stronger. A weak dollar hurts US associates working abroad, since their outgoing expenses are in the local currency and their salaries are paid in dollars.
Just a few points to add to the discussion...
First, working in London, you're taxed by both the US and the UK (the UK rate being about 40% flat with next to no chance for any sort of refund). There are some favorable US tax options that help out come April, but you're also stuck in the position of not paying state taxes at all, which can really come back to bite you depending on your residency status.
Second, some firms provide a favorable exchange rate benefit to their US associates, to make up for the fact that the dollar's ridiculously weak. this is on top of the COLA.
Finally, London is, for the most part, much more expensive than New York, at least in terms of day-to-day costs. In NYC, I could get shirts laundered and pressed for $1.50-2 per shirt. In London, it's £2-2.50 (i.e. $4-5). A cab ride in NYC would run you $10-15, while the same cab ride in London would run £18-20. A ride on the subway in central London can cost you as much as £4. True, there are some things that are more reasonable (e.g. you do get a lot more for your money apartment-wise), but on the whole, the adjusted income that US associates working in London receive should be reduced by about 30%.
Pros and cons aside, working in London is pretty excellent. More reasonable hours and weekends jetting across Europe - works for me.
09:26: Doesn't matter if your COLA is paid in dollars or pounds, or if the USD is weak or strong, does it? It will be adjusted to equalize... that's the whole point of COLA. If the exchange rate for GBP-USD went from 1:2 to 1:4, your COLA would just double.
NY to $210K - the pay for the best should be the best
12:15, it depends on the firm. Some firms have a COLA that fluctuates depending on the exchange rate, some pay a flat dollar or (rarely) pound amount.
This is not totally on point so apologies in advance. I am thinking of taking the QLTT (equivalence London solicitor exam) and was wondering whether anyone knows if biglaw NY firms would cover exam/tuition costs.
Much obliged.
sir just : I am not sure about this, but I heard that they do cover those.
The poster by the name of “Ralbylove” is in no way associated with the individual named Ian M. Ralby, but is instead an alias created without the consent of Mr. Ralby.
Since when has an American legal education been worth more than its British equivalent? This is nonsense. American students start kindergarten a year later than their British counterparts. Moreover, they never fully catch up in terms of syllabus content examined. American college students are still in general education by the time they're 21 and with scant knowledge, if any, of a foreign language apart from Spanish! The best graduates of Oxford and Cambridge far outstrip their Yale counterparts, because they're pushed harder and faster (typically working up to 80 hour weeks), not to mention that they're actually selected by real academics at the interview stage rather than by old-boy alumni.
12:11am is one of the few comments that actually explains the benefits of the COLA and salary differences at US firms abroad. I worked in London for Biglaw as a junior associate and you do VERY WELL financially. Cost of APARTMENTS is higher in London but otherwise 7:53pm is right, what you pay 1 dollar for in London you would pay 1 US dollar for in NYC. Salaries were paid in both POUNDS and dollars, and the tax rate is VERY favorable! I was able to pay off almost all of my loans and save money for a downpayment on a NYC apt. This while travelling a ton, eating out, partying and living in a great apartment in a beautiful neighbourhood. My US lawyer friends there had the same experience. Work quality was pretty well the same as in NY. Sorry folks, the US associates abroad make out like bandits.
What are some of the better real estate firms in London - either US based or UK based.
12:11 am how long did it take for you to qualify as an associate for Biglaw in london? Did u take any tests or the trainee solicitor's course?