Signs that the City’s legal salary race may be cooling have emerged with magic circle firm Allen & Overy announcing it will not raise newly-qualified pay for now and rival Linklaters telling staff it will not ‘rush’ into matching others’ rates.
Allen & Overy said it has decided not to increase NQ pay – currently £107,500 after it was upped last year – ‘at this time’. ‘This is a prudent decision based on a number of factors, including the more challenging business environment,’ a spokesperson for the firm said. ‘We will keep the situation under review.’
Linklaters said it does ‘not believe that the right course of action is to rush into matching salaries at NQ level without properly considering the impact of any changes and the wider economic context’.
The firm, which also pays its NQs £107,500 plus a performance-related bonus, said it believed that ‘a significantly higher proportion of our eligible lawyers received a bonus last year compared to most of our competitors’, in an email to staff which was reported by Legal Cheek.
However, international firm Herbert Smith Freehills bucked the trend and announced it is increasing its NQ salaries by 14% to £120,000 plus bonus, effective from this month.
‘There is intense competition for talent in the international legal sector and, in-line with other leading firms, we have taken steps to ensure remuneration for our associates remains competitive in our markets,’ a spokesperson for the firm said. ‘We are investing across all our associate bands this year, ensuring high performance is recognised at every level.’