Partner at major law firm criticises 100k starting salaries for newly qualified solicitors
A partner at a major law firm has criticised starting salaries soaring to more than £100,000 for some newly qualified solicitors.
Richard Foley, a senior partner at Pinsent Masons, condemned the rates for junior roles at legal practices in the City, which have been driven up by competition for talent.
He claimed the levels of pay were “unsustainable” as salaries for junior lawyers climbed as high as £142,000, driven by US law firms, the Financial Times reported.
Speaking at the Innovative Lawyers Summit, Mr Foley said: “You see stuff in the press about £125k as a starting salary for an NQ [newly qualified lawyer].
“If I was on the other side of the table, I would be thinking how much more value am I going to get from that person?”
He added: “The levels of pay in major private practice law firms are completely unsustainable.”
Newly qualified solicitors in the City are now said to boast salaries that are greater than accountants and bankers, after wealthy US law firms fought to secure young talent.
Kirkland & Ellis, which is the highest grossing law firm in the world, reportedly pays junior lawyers a starting salary of £142,000 a year at the current exchange rate.
Hays, the headhunting firm, told the FT that the starting salary only fell slightly short of the typical salary for an audit director at an accounting firm.
White & Case, a New York-based law firm, announced this month that pay for newly qualified lawyers would rise from £105,000 to £130,000 from January.
A group of UK firms known as the ‘Magic Circle’ last year began raising their starting salaries for newly qualified lawyers to £100,000 in response.
However, the financial impact of the pandemic has subsequently forced many of them to pare back the size of the pay packet for junior lawyers - a step not taken by US firms.
“The salary war within the legal industry is just not winnable for the UK firms,” Freddie Lawson, a director at recruiter Fox Rodney, told the FT.
Michael Chissick, managing partner of London-based Fieldfisher, added: “My heart drops when I see newly qualified lawyers in US firms earning more than some of our partners. They don’t need to pay that. It’s not a market rate. They are creating a new market.”
The row comes against a backdrop of ongoing scrutiny of pay at the UK’s leading law firms after many availed themselves of taxpayer support during lockdown.
More than 90 per cent of law firms were furloughing staff even though less than a third expected their profits to fall by more than 25 per cent this year, previous analysis found.
The number of firms that have furloughed at least some of their staff rose from 77pc in April to 91pc in May, according to research by accountants Saffery Champness and the Institute of Legal Finance & Management.
Around a fifth of law firms cut pay due to the Covid-19 crisis.
Many of the City’s biggest firms announced pay freezes or cuts for highly paid lawyers but did not resort to furloughing them fearing the reputational damage this could cause.
