Baker McKenzie will increase junior lawyer pay whereas rivals freeze salaries

Legislation agency Baker McKenzie has elevated pay for newly certified legal professionals to £110,000, greater than the extent supplied by some “magic circle” rivals, as employers take totally different approaches to tackling the financial slowdown.

Baker McKenzie boosted salaries for London-based junior legal professionals by £5,000 on Tuesday, turning into the newest agency to take a extra aggressive stance on attracting expertise.

A number of different companies have raised pay for junior legal professionals prior to now two weeks, together with Herbert Smith Freehills which elevated newly certified salaries by 14 per cent to £120,000.

Nevertheless, different legislation companies have eschewed pay rises due to financial uncertainty.

In June Allen & Overy instructed employees it was not elevating pay for its most junior legal professionals to greater than £107,500. In an announcement the agency mentioned the transfer was a “prudent resolution based mostly on quite a few components, together with the tougher enterprise setting”. 

Linklaters has emailed employees in latest weeks to say it won’t “rush” into matching rivals’ pay rises. The e-mail, first reported by web site Authorized Cheek, mentioned “we don’t imagine that the precise plan of action is to hurry into matching salaries at NQ degree with out correctly contemplating the influence of any adjustments and the broader financial context”.

Rivals Freshfields Bruckhaus Deringer and Clifford Likelihood each raised newly certified lawyer pay to £125,000 in latest months.

Throughout the pandemic legislation companies skilled a extreme expertise scarcity as document dealmaking pushed salaries for probably the most junior legal professionals to greater than £160,000 on the most worthwhile companies.

Akin Gump Strauss Hauer & Feld now pays London-based newly certified legal professionals £179,000, following a change to the trade charge it makes use of to transform {dollars} to kilos.

However surging inflation, harder regulation and the conflict in Ukraine are actually weighing on demand for legal professionals.

Kathleen Harris, head of US legislation agency Arnold & Porter’s London workplace, mentioned: “I feel that we’re in an unsure interval as an entire, economically . . . We’re in a extremely tough place to forecast what the long run seems like — we’ve seen the overall rumblings round what’s going to occur with taxation, everyone knows the price of dwelling has elevated . . . What which means total for salaries in a service-led trade is unclear.

“I don’t really feel like I did final yr, the place there was an actual rush for everyone to maintain up with the pay conflict . . . This yr feels . . . extra reflective.”

Latest wage rises for junior legal professionals have triggered a wider overhaul of pay at companies comparable to Slaughter and Could. In April the agency handed out will increase of as much as 20 per cent to associates to create a wider unfold between pay for probably the most junior and senior legal professionals.

Ed Poulton, London managing associate at Baker McKenzie, which had turnover of $3.1bn within the yr to the top of June 2021, mentioned newly certified lawyer pay had been elevated as a part of a pay assessment for all associates over the summer time.

“In the event you improve NQ wage you then instantly must assess the influence throughout the entire wage vary,” he mentioned. “It’s a tough steadiness between paying competitively on the junior finish and making sustainable business selections.”