The bidding wars for new lawyers are over in the UK according to an article published today in the Times (UK)…
The article reveals that Freshfields has called an end to the bidding war for new associates by announcing to staff that their pay would be frozen at current levels until 2010, while salaries for newly qualified solicitors would be cut from £66,000 to £59,000.
The article reveals..
It is the biggest pay cut at a large British law firm in decades, recruiters said, and shows how desperate even the magic circle is to reduce costs as fee income plummets. The move also brings an abrupt end to a frenzied bidding war that resulted in inexperienced, twentysomething lawyers commanding salaries of up to four times as much as newly qualified teachers.
Rapid expansion by many City firms, combined with poaching of staff by investment banks and American law firms expanding into Europe, pushed starting rates to more than £60,000 at the top firms. Those at the London office of Sullivan & Cromwell, the blue-chip Wall Street firm, were the most handsomely rewarded, earning £97,500 a year.
Junior lawyers could then expect startling pay rises for their first three years, in addition to generous bonuses, with many earning more than £100,000 after less than five years out of law school. However, their prospects are no longer nearly so bright. Other firms are almost certain to follow Freshfields’ lead either by freezing pay or cutting starting rates, or both.
Read the full article at http://business.timesonline.co.uk/tol/business/law/article5697738.ece
It’ll be interesting to see if this pay freeze will extend to offices outside the UK. Will we see associate pay rates frozen and dropped in places like Hong Kong, Dubai, Singapore & Shanghai ?
