A battle has developed on either side of the Atlantic over pay for talented lawyers, with some American law firms paying high dollars to London lawyers – in US dollars as well.
Newly qualified lawyers in Britain working for US law firms can now earn up to US$180,000 (£137,400) the FT reports.
The US firms are paying substantially more than their UK counterparts in the Magic Circle with Kirkland & Ellis paying staff in dollars, helping insulate them from the falling value of the pound.
It has also extended the increase in base salaries for its US associates to their London peers: newly qualified associates in the firm’s class of 2015 will receive $180,000, the FT say.
“Kirkland & Ellis is committed to paying top-of-market compensation to all our lawyers by reference to local markets. We always aim to hire and retain the best legal talent in the market, which we see as critical to our ongoing success,” said Stephen Lucas, a corporate partner, in a statement.
Cravaths Started All This
The pay hikes started with a 12.5 per cent increase to Cravath Swaine & Moore associates in the US and increasing their pay for many in London as well.
A newly qualified London-based lawyer at the US firms Davis Polk and Atkin Gump now receives £112,500, but paid in sterling. White & Case raised its starting salary for newly qualified lawyers in London by £15,000 to £90,000 last year but is not planning further increases this year.
By contrast, newly qualified lawyers at the Magic Circle firm Clifford Chance receive £85,000. Freshfields has also increased its rates for newly qualified lawyers from £67,500 plus bonus last year to £85,000 with no bonus this year.
Allen & Overy has kept their starting salary at £78,500.
There are about 100 USa law firms in London, with increases yearly although the Brexit vote has yet to have its effect on the UK market in terms of future prospects.
There are, however, longer hours with a 29 per cent increase in hours worked at London offices of US firms, according to a recent study.
Even so, one recruiter suggested this cultural difference was disappearing. “It used to be people would give a flat ‘no’ when approached to work for US law firms . . . but now lawyers all work long hours,” he said.