Milbank sets standard in Germany as newly-qualified rates hit €100k
US heavyweights raise newly-qualified salary benchmark in Germany as battle to retain top talent intensifies
October 04, 2006 at 08:03 PM
2 minute read
US firm Milbank Tweed Hadley & McCloy has set a new benchmark in the current associate salaries pay war in Germany, offering newly-qualified lawyers €100,000 (£68,000) plus a substantial bonus.
The move places the firm at the top of the pile for associate salaries, narrowly ahead of New York rival Shearman & Sterling, which became the first firm to hit the €100,000 mark for newly-qualified associates two weeks ago.
However, it is understood Shearman does not pay a bonus on top of that figure.
Milbank previously paid starters 87,000 (£59,000) plus bonus, which prior to this round of pay hikes was one of the best packages around. The figure has also risen at the upper end with senior associates at the firm now receiving €200,000 (£135,000). The bonus is discretionary but could equate to as much as 20% of a lawyer's take-home pay.
Milbank's move comes after Allen & Overy last week became the latest UK firm to hike its salaries in Germany. Newly-qualified lawyers at the magic circle giant will now receive €95,000 (£64,000), a rise of 19% from a previous top rate of €80,000 (£54,000).
While associates of all levels will receive increases of about 15%, the firm has scrapped the associate bonus, which could equate to as much as 10% of the fixed salary.
Slaughter and May ally Hengeler Mueller kicked off the round of pay rises by raising its salaries in May. The firm increased newly-qualified pay by 13% from €80,000 (£54,000) to €90,000 (£61,000).
Since then, a host of firms have followed suit, including Cleary Gottlieb Steen & Hamilton, Herbert Smith ally Gleiss Lutz, Freshfields Bruckhaus Deringer, Linklaters, Lovells and White & Case.
German partners have attributed the pay rises to the German legal market's current rude health and the shortage of space large firms have in their equity part-nerships. Maintaining competitive salaries is regarded as the only way to continue to attract the top talent.
One partner at a US firm that is yet to raise its associate salaries said: "We have not made any adjustments yet, but if you want to stay competitive, you cannot buck the trend."
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