Are you after money and glory, or do you just want a decent wage and enough time to relax and enjoy life? These are a couple of questions that will be in the minds of young lawyers seeking NQ or associate positions. Work/life balance and wage disparity have long been topics of discussion among the legal community – after all, lawyers are almost hallmarked by the long hours they put in for their firms.
So what exactly are the issues? To start with there has been a long, historical difference in salary between US and British law firms. Currently, a first-year associate in a major US firm using the Cravath scale can expect a basic annual wage of about US$205,000, as compared to the equivalent of USD140k in a top-paying Magic Circle firm.
In 2010, Bingham McCutchen became the first firm to offer London NQs £100,000. At the time it was seen as an extraordinary amount, with plenty of people asking if a raw employee straight out of training could possibly be worth that much. Now though, more than a dozen firms in London are offering £100,000 or more, including UK firms.
The recent hikes in US firms and UK firms are a symptom of the current war for talent taking place as business activity increases in earnest. In Hong Kong, M&A / PE lawyers are in very high demand – more so that at any point in recent years, as large stores of cash are looking to be deployed in a market with a number of undervalued assets. UK lawyers are now often working similar hours to their US counterparts, and so more are making the move to get significantly higher salary packages. This is leading to a number of UK law firm teams seeing a serious shortage, with some Partners pushing for associates in these teams to be better rewarded.
But realistically, it’s highly unlikely that UK firms will be able to offer the same starting or associate salaries as their US counterparts, at least for the foreseeable future. Magic circle and other large international firms generally have far more trainees and support staff than their US rivals, and so simply cannot afford to pay every one of them such high salaries. So traditionally, UK firms have looked at other ways of attracting and keeping talented young lawyers. For example, flat-band salaries for NQs are being replaced with incentive-driven salary scales, depending on performance.
Some firms are also dangling the fishing-rod of a better work/life balance, by implementing policies on part-time and flexible working arrangements and supporting staff with family commitments. Some are also providing office gyms and subsidised sporting and social activities. Participation in community projects may also form part of the staff performance appraisal criteria. It is yet to be seen, however, if such incentives can stem the flow of associates to other firms, in-house, or indeed, out of the law.
By BEN COOPER, Managing Partner, Ashford Benjamin Ltd.