Sad but true. Newly qualified lawyers in the UK are up for more pay cuts as firms like Clifford Chance, Allen & Overy, Slaughter and May and Hogan Lovells have all announced salary reductions for solicitors qualifying this autumn, while the jury is out for firms like Linklaters who are still in pay discussions.
The Law Gazette reports that at Allen & Overy, NQs will receive a minimum of £90,000 – £10,000 less than last year – and Clifford Chance has reduced pay to NQ lawyers to £94,500 including bonuses.
Slaughter and May has reduced its base salary’s baseline salary by £5,000 to £87,000, while NQs at Hogan Lovells’ London office will receive £85,000, reflecting another £5,000 reduction.
The pandemic has reduced the previous high competition with US law firms in particular with the magic circle firms increasing their packages to a minimum £100,000 but with the reductions now biting, albeit permitting NQs to pay their rents.
Tony Williams, (right) principal of legal consultancy Jomati and former managing partner at Clifford Chance, warned of a rocky year ahead for junior lawyers. ‘The pandemic has made the market much more uncertain. Retention rates of trainees qualifying in September will vary significantly between firms but in general firms are likely to be more selective as to those that they keep on,’ he said.
‘Until the medium-term impact of the pandemic is known firms will be very restrained rehiring and may even adopt hiring freezes. Some redundancies cannot be ruled out. US firms are also likely to be more cautious as to hiring, hence reducing some of the alternatives available to NQ lawyers.’
What about next year? That will all depoend upon the appetite from US firms for NQ lawyers, Williams says.
If there is a silver lining it is that many magic circle firms are keen to avoid the mistakes made during the GFC in 2008 when the stopped recruitment and let junior lawyers leave.
Charles Martin, former senior partner of Macfarlanes, said firms ‘need to be calm and not do damage in the short term that [they] regret in the long term’. During a webinar hosted by the International Bar Association, Martin said Macfarlanes had ‘opted for a message of continuity and calm’.
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