Freshfields Bruckhaus Deringer has broken ranks from its Magic Circle peers on associate salaries, increasing newly-qualified (NQ) pay from £125,000 to a new high of £150,000.
The move puts clear water between the firm and Slaughter and May, Linklaters, A&O Shearman, and Clifford Chance, all which pay their NQ lawyers £125,000.
Freshfields trainees will also benefit from pay increases, with first-year trainee pay rising from £50,000 to £56,000, while second-year trainee salaries are up from £55,000 to £61,000.
Commenting on the pay rises, London managing partner Mark Sansom said: ‘We’re committed to embedding a culture that supports our people to deliver their best, knowing their contribution is valued and rewarded. Being part of Freshfields means working alongside the best lawyers in the market and being fairly recognised for excellent client service on the most complex and high-profile legal work.
‘This move follows a year of strong growth for the London business, thanks to the dedication of all our people. It also reflects our confidence in the firm’s continued market leadership across all our London practices, further boosted by the success of the material investments in the US and other markets.’
The salary hike will pile the pressure on the rest of the Magic Circle to offer competitive renumeration for junior talent, particularly considering the competitive pay packages on offer at their US counterparts.
Speaking to Legal Business, David von Dadelszen, a director at Jameson Legal, said: ‘Based on previous experience, I imagine the whole Magic Circle will ultimately fall in line. There will probably be some outliers who will say they won’t get into a salary war. But eventually they will end up paying the same as there is such a heated market at NQ level. Nobody will want to feel like they are the poor cousin.’
With Paul Weiss already shaking up the City recruitment market with its rapid London expansion, this latest move by Freshfields is set to have even more of a knock-on effect on the Silver Circle and other City firms, as NQs eye up and array of lucrative offers post-qualification.
‘As always, it will impact City firms outside the Magic Circle which don’t pay as much. There will always be NQs prepared to move for money,’ von Dadelszen adds.
holly.mckechnie@legalease.co.uk
For more, see Market forces: Paul Weiss, Kirkland and the war for London talent
