McDermott Will & Emery has become the latest firm to increase pay for London associates, raising salaries for newly qualified (NQ) associates to $225,000 as competition for talent among firms in the City intensifies.
Effective from 1 January, the Chicago-headquartered firm will raise London associate pay from the current rate of £147,500 ($190,000), matching the so-called ‘Cravath scale’ for associate compensation, named after the elite US firm known for establishing salary benchmarks.
Cravath Swaine & Moore’s latest rates, announced in November 2023, set NQ pay at $225,000, with $235,000 for second-years and $260,000 for third-years, rising to $420,000 and $435,000 for seventh- and eighth-years respectively.
London managing partner Aymen Mahmoud (pictured) told Legal Business: ‘Our focus is on being the very best, and to do that we need to recruit and retain the very best. With this change, we think we are now at the top of UK associate compensation.’
McDermott will also match Cravath’s bonuses, but with adjustments that give associates the potential to earn even more.
Mahmoud continued: ‘We already know our culture to be a key differentiator; now we have yet another. We are very excited about the future for our talented group of associates and seeing the greatness that they can achieve.’
While the conversion rate into British pounds varies from firm to firm, McDermott will now stand alongside other leading US firms such as Milbank, which offers an NQ salary of $225,000. Paul Weiss, Gibson Dunn, and Quinn Emanuel are also in this salary bracket, with starting salaries for newly qualified associates at £180,000 in London.
While competition for top talent is fierce, the sustained pay increases for NQ lawyers have prompted much eyebrow-raising among the wider market. Hannah Benger, business director at Montresor Legal told LB: ‘The continual upward trend of premium US firm salaries invites the inevitable question – how long is it until the first firm announces a £200,000 salary for NQs? One assumes it will be soon.’
‘It’s important for the mid-market to really differentiate themselves in what they can offer their lawyers,’ Benger adds. ‘Vastly improved working hours, less intense expectations and highly flexible working policies are just a few options that would make them genuinely attractive to a lot of lawyers who might otherwise be tempted by the “big money” option.’
Salaries at leading US-headquartered firms continue to outstrip those on offer at the top of the UK market, with the biggest four Magic Circle firms recently increasing NQ pay to £150,000. David von Dadelszen, director at James Legal comments: ‘Big US firms seem to be able to reflect high NQ salaries up the bandings, but most UK firms can’t.’
‘Associates aren’t mugs – they read the press and speak with each other/recruiters,’ he added.
In recent months, McDermott’s London office has experienced a wave of change. Alongside Mahmoud’s promotion to managing partner, private equity veteran Graham White has stepped in as London senior partner. The firm has also bolstered its ranks with notable laterals including debt finance heavyweight Chris Kandel from MoFo and private equity partner Fatema Orjela from Sidley.
