Times are still tough in the legal industry. The industry shed 1200 jobs last month and we hear about layoffs — mostly staff, but some attorneys too — on a weekly basis. On the flip side, Citi Private Bank tells us that Biglaw is growing again with improvements in both demand and billable rates.
Now comes news that some global firms are handing out salary increases and bonuses?
Maybe good times — or at least above-average times — are here again….
The action is coming from across the pond, but at a pair of firms with multiple offices around the world. The first domino to fall came from Slaughter & May, which ended the month of April by announcing raises effective May 1.
NQ [Newly Qualified]’s are set to receive the biggest pay rise, seeing their remuneration jump up from £63,000 to £65,000 on 1 May 2014.
The salary for one year post-qualified associates will rise from £69,500 to £70,000, marking an uptick of 0.7 per cent.
For second-years, it will increase by 1.3 per cent from £78,000 to £79,000.
Third years will see a 2.3 per cent rise rise from £87,000 to £89,000.
Meanwhile, first year trainees will pocket an additional 1.3 per cent with salaries jumping from £39,000 to £39,500. Second years will take home an additional 2.3 per cent, increasing from £44,000 to £45,000.
A decent boost, but some have pointed out that U.S. firms in London are still paying more, making this more of a belated catch-up than a real sign of progress. Still, the fact that the stodgy London firms are opening their checkbooks at all means their read of the market is changing — for the better.
Soon after Slaughters moved, Linklaters — a firm with a pair of U.S. offices — announced a boost:
The firm has almost doubled last year’s pay increase for second and third year PQE [Post-Qualified Experience]. In 2013, its third year PQEs received a pay rise of £1,000, going from £88,000 to £89,000 but this year their pay jumped by £4,500. Second year PQE salaries also jumped from £78,250 to £82,000 compared to a rise of £2,250 last year.
The rates mean Linklaters NQ’s earn the same amount as their Slaughter and May counterparts but first year PQEs now earn £500 more and second year PQEs £2,000 more.
We’ve got an old-fashioned salary war. Linklaters had pay-band freezes in effect in 2010 and 2011, so this also reflects a healthy thaw.
Finally, Osborne Clarke recognized a hefty revenue bump and decided to share the wealth with its employees:
[Managing Partner Simon] Beswick said that the firm intends to divvy out a share of the profits, with every Osborne Clarke staff member receiving a 2 per cent uptick on their standard salary.
“When the firm does well we want to share the benefits with all involved,” he said. “If the firm generates a certain revenue beyond good performance, we distribute part to everyone by way of a profit share. It’s the first time we’ve done that since 2008.”
Its 40 percent revenue jump over the last two years thumps what American Biglaw has been doing, but it’s nice to see a firm in a giving mood.
While the salary war between Slaughter and Linklaters hasn’t spilled over to the former colonies yet, it’s an exciting prospect.
Linklaters third year PQE salaries jump 5 per cent to £93,500 [The Lawyer]
Slaughters bumps up NQ salary by more than 3 per cent to £65,000 [The Lawyer]
Osborne Clarke’s turnover shot up by more than a quarter in 2013/14, from £112m to £142m, setting all staff members up for a 2 per cent bonus [The Lawyer]