The NQ Lawyer Salary War Hots Up
Today Slaughter and May announced that it is going to raise NQ salaries by £5000, to £70,000. That's a 7.7% rise on 2014 (and a 13.8% increase since 2013).
The other magic circle firms now fall behind by at least £2,500 (with the exception of Freshfields who have some flexibility with their 'career milestone' system).
The signs of a battle started to emerge in 2013-14 where across the board the most visible jump in salaries was at the newly qualified. Typical magic circle salaries rose 4%, from £61,500 to £64,000; although a significant hike on previous years, this was still below the £65,000 offered at the market peak in 2008 (and, after inflation, substantially lower in real terms).
From 2014-15, as a result of the 2014 rises, lawyers at newly qualified level were for the first time earning more on average than they were in 2008 (from £65,000 to £67,500 in the magic circle)- although, after inflation, they were again still earning substantially less in real terms.
This 2015 rise sees NQs still earning less in real terms than in 2008 - not quite a return to the 'good old days' (when from 1999-2000 NQ salaries rose from £35,000 to £50,000 in 18 months) just yet, but a £5000 rise is one hefty statement that junior lawyers are back in demand.
However, the rises have been on the cards for a while, especially given the fact that magic circle training contract places have reduced by 25% since 2008. Combine this with the highest demand for junior lawyers since the crash and the rise and rise of the US elite in London and it can only move one way: NQs will be able to ride the wave for a while yet. Will it get up to a real term rise since 2008? Not for a few years just yet, but if inflation stays low for the next couple of years....who knows.
Keep an eye on the other magic circle firms' announcements over the coming weeks/months - it's certain to make interesting reading.
(To read Edwards Gibson's assistant salary summary for 2014/15 just click here)