#42 The Legal Profession This Week - What Are Junior Lawyers Worth?​

By Dheepa​

Junior Lawyers - What Are You Worth?

The rising number of US law firms in London has severely disrupted the salary expectations of UK lawyers. While the competitive pressure is forcing UK law firms to raise their pay scales, a recent survey by Law.com shows that a majority of law firm partners think their NQs earn too much. 95% of respondents believe that salaries for junior lawyers are too high with only 5% believing that the latest pay war is a positive development.

“The market has been subverted by uber-aggressive U.S. firms, to no-one’s benefit” (Law.com). A majority of respondents felt that a salary in the £70,000 to £100,000 range was appropriate for NQ lawyers. This sentiment is especially interesting when considered alongside a separate report that NQs at U.K. Top 50 firms still only make only a fraction of the top earner’s salary, despite the multiple salary increases this past year. Although the COVID-19 pandemic saw many firms generate new all-time highs in revenue, it seems that partners continue to reap much of the rewards. One recruitment consultant noted that, outside of the Magic Circle, the increased workload of the past two years has yet to be reflected in pay levels.

It’s not just partners that think NQs make too much. Law.com also reports that a large number of in-house lawyers share the same opinion. Many are also concerned about who will be bearing the brunt of these increased salaries. A majority of private practice lawyers do anticipate their firms raising client fees to cover the cost of NQ salaries. However, with in-house budgets remaining low, firms are likely to face push back from their clients especially if the raised fees come soon after an increase in junior lawyer salaries.

Beyond the financial discussion, both partners and general counsel appear to be concerned that high salaries translate to higher performance expectations at work, which may lead to a greater risk of burnout and soaring attrition rates. The fear is that while increased salaries provide short term competitiveness in the recruitment sphere, it ultimately leads to long term losses in talent.

‘Business as usual’ – the notable deals and cases which went ahead this week:

Allen & Overy and Linklaters are advising on the sale of Citigroup’s consumer banking business across SouthEast Asia to Singapore-based banking giant United Overseas Bank Limited (UOB). A&O is acting for UOB while Linklaters is advising Citigroup.


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