Shearman & Sterling has announced an increase of 7 percent in its London associate salaries, putting the firm's rates well ahead of those at top U.K. firms. The rises mean a newly qualified solicitor based at the firm's London office will get paid 80,000 pounds ($157,976), up from a figure of 75,000 pounds last year. Senior associates will receive salary increases on a discretionary basis, with the base salary level moving up to 170,000 pounds ($335,699) a year.

Trainee solicitors will also get a bump-up from the review, with first-years now pocketing 39,000 pounds ($77,013) -- up from 36,500 pounds -- and second-years in line for 41,500 pounds ($81,950). The increases will make them among the highest-earning trainees in London.

Remember, however, that these figures are for U.K.-qualified lawyers. As one commenter noted, U.S. lawyers working in London, whether for U.S. firms or Magic Circle firms, generally do better. For more discussion, see here.

Linklaters has followed suit:

In response to Shearman's move, Linklaters announced raises of nearly 4 percent for junior lawyers, in what will be seen as a confident move from the U.K. giant. A newly-qualified solicitor (NQ) at the Magic Circle law firm is now set to earn 66,600 pounds ($131,500), up from 64,000 pounds ($126,300) in 2007.

Finally, in other U.K. news, the London office of O'Melveny & Myers is in "disarray" and "turmoil," according to The Lawyer (via the ABA Journal). That publication reports that "underinvestment by the firm's Los Angeles (LA) hub [has] prompted the exit of a fifth of its partners and a generation of senior associates." We dropped OMM a line to see if they had any comment, but they didn't get back to us.

Update: More here from Legal Week, which reports that O'Melveny is "is in talks to bring its remuneration structure for London partners into line with the rest of the firm."

Shearman leads London associate salary hike, Linklaters follows [Legal Week]
O'Melveny in disarray as UK dream goes sour [TheLawyer.com]
O’Melveny’s London Office is ‘In Turmoil,’ Legal Publication Says [ABA Journal]

Earlier: London to... £75K Be Happy You Have A Job!

Starting salaries for new associates in the London offices of U.S.-based firms can be quite generous. They often exceed the New York going rate of $160,000, approaching $200,000 at top shops. See here (noting that Weil and Cleary pay newly-qualified lawyers the equivalent of $180K, and Latham pays NQs the equivalent of $190K, in London). [FN1]

But top U.K. firms, known collectively as the "Magic Circle," aren't quite as generous to their London associates. From the ABA Journal:

[W]hile some magic circle firms may up the ante at least a little this year, some partners are complaining that junior lawyers already are overpaid.... Says an unnamed Clifford Chance partner: “People should be grateful for having jobs in the current market. I could easily see the rises not happening now and being deferred until later in the year.”

Currently, starting lawyers at leading London firms reportedly make between 63,500 pounds and 65,000 pounds. That translates to a range of about $125,000 to $128,000 in U.S. dollars.

Additional detail, from Legal Week:

Partners with City giants including Linklaters and Clifford Chance (CC) - normally early movers - told Legal Week they are not expecting to see significant increases this year, as they feel the impact of the credit crunch.

Linklaters, Freshfields Bruckhaus Deringer and Allen & Overy (A&O) are all in the process of reviewing their salary bands, with partners conceding substantial rises are unlikely. Increases at the junior end are thought to be particularly unlikely.

Insofar as the market for legal services is becoming increasingly global -- London has been gaining on New York as a global financial capital, and competing with it for talent -- pay stasis in London is bad news for those seeking pay raises in New York.

NY to 190? As the Brits like to say, "Not bloody likely."

[FN1] These figures are generated by converting pounds to dollars. But yes, we know that London is even more insanely expensive than New York.

Firms to hold off on major pay hikes after crunch [Legal Week]
London Partners to Associates: At $125K, We’re Paying You Too Much [ABA Journal]

This month's ATL / Lateral Link survey, focused on which firm you would choose if you could go anywhere, was dominated by Latham & Watkins and Wachtell Lipton. But several firms were close behind.

  * Respondents had several reasons to applaud Latham: "Prestige", "Friends there are happy", "Awesome firm, awesome people", "They rock", "Prestige, substantive work, great litigation practice", and "Top notch clients and matters; kick ass bonuses; selective hiring in a good way (need good grades plus a good; personality); Vault top 10 without the stuffiness of originating on the east coast; good growth but no risk of Brobecking (great management + tons of funds).....should I go on?" Or, as one respondent summed it up: "ass kickers."

  * At Wachtell, with 2007 profits per partner of $4.48 million, money played a key factor in respondents' enthusiasm for the firm: "100% bonus", "money", "it's all about the cash", "I want the compensation!", "money honey" and, of course, "CASH."

  * "Money" was also a big plus for Cravath (even though their profits per partner were a mere $3.3 million). Voters also noted "Prestige, training, can go anywhere else afterwards."

  * "Prestige" and "Exit opportunities" also won several votes for Skadden, who also had more than $2 billion in revenues last year. (Their SideBar program is pretty cool, too.)

  * "Bonuses and work" were praised at Kirkland & Ellis, as was stability: "They're well positioned for the credit crunch and M&A downturn. And the pay's better, of course."

  * Sullivan & Cromwell was also coveted for "good work, and $$$$" as well as "reputation." With profits per partner of $3.13 million, that "$$$$" is appealing at multiple levels.

  * Paul Hastings surged in popularity as respondents complemented their labor & employment practice and their compensation structures in Atlanta and Chicago.

  * In an incendiary match-up, Davis Polk was heralded as "da bomb", while Boston heavyweight Ropes & Gray was declared "the bomb."

  * Among the Magic Circle firms, Allen & Overy supporters declared "Great offices, european attitude" while Linklaters was called "the best globally, both in equity and debt."

  * Debevoise won several votes for its combination of "prestige and culture".

  * Litigators were torn between Quinn Emanuel, where "hard core litigators with a great reputation" create an atmosphere where "[p]ersonality, quirkiness, and fun seem prevalent," and Williams & Connolly, as "the best litigatio[n] shop. Period."

So of these fourteen juggernauts of practice, prestige, and sweet, sweet profits, who would you most like to work for?

Cast your vote in today's ATL / Lateral Link survey, after the jump.

With apologies for the delay, here's a bonus announcement made on Friday, by the Magic Circle firm of Linklaters. We don't have the memo, but a confirmed source informs us:

Linklaters matched the New York market bonus for its US qualified associates. Special plus regular bonus, same scale as Cravath.

No hours requirement. The bonus will probably be paid in one lump sum in January (memo says all amounts will be paid by January 31).

Those who have been here for a few years weren't really concerned -- Linklaters always matches. But some of the newer associates were nervous because the delay seemed unnecessary. Better late than never I guess.

To quote Bjork -- no, not the wearer of the infamous swan dress, but the former Linklaters associate -- Viva Linklaters!

Guess it's "Magic Circle" night here at Associate Bonus Watch. Fresh on the heels of Freshfields, we've confirmed the Allen & Overy bonus announcement.

Check out the memo, announcing year-end and special bonuses at market rates, after the jump.

From the London Times:

Lawyer aims for KO

A City solicitor who swapped the boardroom for the boxing ring is to make her professional debut. Laura Saperstein, 36, from Tottenham, North London, was a mergers and acquisitions lawyer with Freshfields, earning £75,000 a year. Three years ago she left to train full-time and won the British lightweight amateur title. Her bout, against a Swedish opponent at Tooting Leisure Centre, will be on November 18.

We're guessing that Ms. Saperstein is enjoying her new career, in which she's already encountered significant success. But perhaps she misses her old job, or at least the paycheck of her old job, this time of year.

Her former employer, the Magic Circle firm of Freshfields Bruckhaus Deringer, just announced bonuses for its New York and D.C. "fee earners." The memo appears after the jump.

Sadly, we'll probably never learn whether former Clifford Chance partner Michael Bryceland was asked to "bend over" (a la Aaron Charney). Unlike Sullivan & Cromwell, CC settled the case quietly, for an undisclosed amount.

Of course, if you have any details, please feel free to send them to us by email (subject line: "Clifford Chance"). Thanks.

Revealed: CC pays out in sexual orientation claim [TheLawyer.com]

No, not that Bjork. We're talking about a different idiosyncratic Scandinavian, who also harbors musical aspirations.

By way of introduction:

This email was sent to the whole of Linklaters by one of their Swedish assistants associates!

Brilliant.

Oh those crazy Swedes...

Check out the email -- which has made the rounds worldwide, is still being forwarded as we speak, and was going to wind up in your inbox eventually, so we feel no qualms about posting it -- after the jump.

It appears that the salary wars have made their way to London. With London salaries rising into the neighborhood of £65,000, and with the current exchange rate over two $/£, the gap between New York and London salaries is narrowing considerably. This from the London Times Online:

City sources said newly-qualified lawyers at A&O would be offered salaries of £65,200 – above its magic circle and other UK rivals.

The latest pay rise pushes Allen & Overy into the territory of US law firms that typically offer between 20 and 40 per cent more than UK firms in an attempt to lure away skilled lawyers.

Chris Hickey, a legal recruiter at Robert Walters, predicted that several large US firms, whose London offices are enjoying a significant boom on the back of strong private equity and mergers and acquisitions markets, would also be forced to revise their salaries upwards.

With, as the article points out, U.S. firms typically paying 20-40% more than UK firms in London, the U.S. firms may soon be paying their associates in London more than their associates in New York. This will in turn likely force the NY salaries even higher. Could we soon hit $200,000 for first year associates?

Remember that root canal we had? It's time for us to go in for a follow-up.

Hence this lunchtime open thread. Please post pay raise news in the comments. Since it's Friday afternoon, we expect at least some news to break.

Before we leave, here are some items we've recently verified:

1. From a confirmed Linklaters source, we hear that "Linklaters has reinforced its commitment to be a top player in NYC market."

We interpret this as: "We're on the $160K scale. Yippee!"

2. From a confirmed source at Sonnenschein, Nath & Rosenthal:

Our NY office is matching the New York pay raise, and our Chicago office is going to match Sidley's 145K raise to Chicago 1st years. We expect that all Chicago firms will go to 145K, and some may feel compelled to go higher (Kirkland?) to compete with Skadden.

We only announced the 1st year rates. We have not set the upper level associate structure, which is somewhat more compressed than at certain other firms.

3. Finally, Brown Rudnick has matched. Their memo appears after the jump.

We'll review your comments, and resume salary coverage, when we get back. Thanks.

Earlier: Previous announcements of law firm associate salary increases (scroll down through "Skaddenfreude" archives)

Tons of moves to report today -- and these are just the highlights:

New Partners:

* Latham & Watkins -- which, as discussed yesterday, is very popular with Supreme Court clerks -- has elected 26 new partners, in offices around the country. That's enough lawyers to start a whole new law firm.

You can check out their names here. If you graduated from law school around 1998, you probably know some of them.

"Magic Circle" Hiring Spree:

The top British law firms -- aka the "Magic Circle" firms -- continue to cast spells over U.S. practitioners, who have been flocking to their American offices in droves.

* Louis Kimmelman, former co-chair of O'Melveny & Myers's international arbitration practice, is heading to Allen & Overy's rapidly growing New York office. Kimmelman regularly appears before the International Court of Arbitration of the International Chamber of Commerce, the American Arbitration Association, and other tribunals.

* Finance lawyers Zarrar Sehgal and Anthony Lopez III, to Clifford Chance (NY), from Milbank Tweed and Cahill Gordon, respectively.

Lateral Moves:

* Corporate and securities lawyer Michael Student, to Brown Rudnick, from Holland & Knight.

* Tax lawyer James Tander, corporate lawyer Patrick de Carbuccia, and real estate lawyer Michael Pollack, to Reed Smith (NY). They come from, respectively, Skadden Arps, Willkie Farr, and Withers Bergman of (New Haven, CT).

Government to Private Sector:

* Sharon McCarthy, a former deputy chief of the U.S. Attorney's Office for the Southern District, to litigation and tax boutique Kostelanetz & Fink, as a partner.

Internal Promotions:

* Paul Tvetenstrand, a partner in the structured finance practice group, has been elected chairman and managing partner of Thacher Proffitt & Wood.

Latham & Watkins Elects 26 New Partners [Latham & Watkins]
NY Partners Switching Firms, NY Lawyers On the Move [NYLawyer.com]
More NY Partners Switching Firms [NYLawyer.com]
Firm Promotes 26 to Partnership [NYLawyer.com]
NY Practice Leader Switches Firms [NYLawyer.com]

Not sure how we feel about this development:

For years, outsourcing has been a dirty word inside the world of white-shoe law firms.... A number of large law firms, though, are starting to tiptoe onto far-flung shores.

The latest is Clifford Chance, one of the largest law firms in the world with 29 offices in 20 countries, which will announce plans today to consolidate and move big chunks of its administrative functions like accounting and technological support to an operation in Delhi, India, by next spring.

Ah yes, Clifford Chance -- already renowned for its spectacular associate morale.

We're sure CC associates will love it when their computer freezes up at 2 a.m. the night before a closing, they call the dubiously-named "Help Desk," and they spend 45 minutes trying to explain the problem to an Indian woman who insists that yes, she really IS named "Rhonda."

On the other hand, outsourcing all boring tasks could be good for law firm associates over the long term. Can Bangladeshis be trained to conduct due diligence?

Law Firms Are Starting to Adopt Outsourcing [New York Times via How Appealing]
Outsourcing: Everybody’s Doing It, Even Law Firms [WSJ Law Blog]
Clifford Chance LLP: Associates' Concerns [Internal Memos]

New Partners:

* Sullivan & Cromwell: Jeffrey Chapman, Michael Escue, Hydee Feldstein, Stacey Friedman, Brian Hamilton, Julia Jordan, Eric Kadel, Jr. and Juan Rodriguez.

The partnership promotions will be effective January 1, 2007. Congratulations, kids!

Like many other top New York firms, Sullivan still has a single-tier partnership structure. All partners are equity partners.

And all S&C partners are doing very well for themselves. In 2005, the firm enjoyed average profits-per-partner of $2.4 million. See here (subscription required).

Lateral Moves:

* Private equity lawyer Stephen Culhane, to Linklaters (10 points -- Magic Circle!!!), from King & Spalding.

Government to Private Sector:

* Harry Sandick, to Jenner & Block, from the venerable S.D.N.Y. U.S. Attorney's Office (where he served as deputy chief appellate attorney and, before that, as acting chief of the violent crimes unit).

* Hawyood Haywood Gilliam, to Bingham McCutchen, from the well-regarded San Francisco U.S. Attorney's Office (N.D. Cal.).

[Ed. note: See this comment, and this juicy article. It appears that the office has slipped in the past few years.]

Haywood Gilliam headed the securities fraud section of the U.S.A.O. and worked on various stock options backdating cases. His move to private practice is timely, given the explosion of backdating scandals in Silicon Valley. But Gilliam will presumably be conflicted out of a bunch of cases that he worked on while at the U.S. Attorney's Office.

UK Firm Adds Another NY Partner [NYLawyer.com]
Former Federal Prosecutor Joins Firm in NY [NYLawyer.com]
In Timely Hire, Firm Grabs Backdating Prosecutor [NYLawyer.com]

Lateral Moves:

* Four litigation partners, and possibly a dozen associates, are leaving White & Case to join the New York office of Linklaters -- a "Magic Circle" firm (insert squeal of delight here). The group's practice focuses on white-collar criminal, antitrust, and other regulatory matters.

The four partners are Lawrence Byrne, a former assistant U.S. attorney (S.D.N.Y.) and deputy chief of the DOJ's organized crime section; Joseph Armao, a former assistant district attorney in Manhattan; Lance Croffoot-Suede, who was hired by Linklaters based solely on his fabulous, British-sounding name; and Paul Alfieri, who was not.

* Corporate lawyer Michael Student and bankruptcy lawyer Neil Pigott, to Brown Rudnick Berlack Israels, from Holland & Knight and Mandel Katz, respectively.

* Private equity lawyer Robert F. Kennedy, to Jones Day, from Latham & Watkins.

From the New York Law Journal: "Mr. Kennedy is not related to the former U.S. attorney general and New York senator whose son is a well-known environmental lawyer and political activist."

RFK. Jeez, poor guy. And it doesn't even help him get restaurant reservations.

NY Firm Loses Four Partners, and 12 Associates May Follow [NYLawyer.com]
NY Partners Switching Firms [NYLawyer.com]
Firm Adds NY Private Equity Partner [NYLawyer.com]