Salary Survey: Newly-qualifieds
Supported by GMK Legal
Salaries for newly-qualified solicitors are more transparent than those further up the market, since firms tend to publish them as part of their efforts to woo the most talented graduates.
The gap between the magic circle and the US firms at the top of the market should come as no surprise, then. While the American firms pay their trainees slightly more than their British counterparts, a huge gap opens up at NQ level.
The very highest-paying US firms in London match New York rates for first-year associates – $160,000. That works out at about £96,000, depending on the exchange rate at any given point. However, not all US firms match this – as mentioned above, firms that entered the UK market through a merger typically pay lower wages – and so the average salary for an American firm in London is £83,200. That’s still a cool £13,500 higher than Clifford Chance and Slaughter and May’s £70,000.
Further down the market, the most recent salary rises have yet to emerge. Hogan Lovells and Ashurst are the only two large international firms to release their NQ salary details for 2015/16. The former is to pay newly-qualifieds £70,000, matching the magic circle firms, while the latter will pay in the region of £65,000 (Ashurst operates a merit-based approach to pay rather than a strict PQE progression system, so this itself is a representative average). This in itself shows the range of salaries offered by the large London outfits.
Other firms have yet to show their hand but at the time of our survey in April, the range for a UK top 20/large London international was between £59,000 and £65,000. Hogan Lovells was at the top of that range last year and has actually made a concerted effort to catch the magic circle up in 2015. It is possible, therefore, that Hogan Lovells will be something of an outlier this year and that the range for an NQ at a large London firm this year will be between about £63,000 and £68,000.
Further down the market, there is relatively little clear water between the other large London and international firms and some of their smaller competitors. For example, there was virtually no difference between the NQ salary of the unquestionably mid-sized Farrer & Co (UK 200 rank: 54) and that of Clyde & Co (UK 200 rank: 12). The typical NQ salary at a mid-size firm, however, was slightly lower than Farrers’ in 2014/15, with the range between about £50,000 and the bottom and £59,000 at the top.
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NQ salaries, supported by GMK Legal
As salary reviews are currently under way, we are seeing increases in remuneration at NQ level unprecedented since the recession. In the current climate most firms are conscious of remaining competitive within the market, and want to benchmark against their peer firms, with the NQ rate being the headline figure many firms use to publicise their salary intentions (especially as we are seeing higher retention rates at NQ level, and more external roles coming on to the market than previous years).
While this is most obvious at magic circle level, where both Slaughter and May and Clifford Chance have announced increases to £70,000, some other ambitious firms have realised the importance of keeping pace and have announced comparable NQ rates (despite possible discrepancies which means in some cases NQs could be on higher salaries than their lower banded 1PQE colleagues). As the summer progresses and more salary reviews are disclosed, we expect most City firms will follow suit and NQ remuneration will increase by a higher percentage than at any time in the previous six years.
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