Allen & Overy kicks off review of junior lawyer pay
Firm brings in external consultants for review of associate salaries. Nothing off the table in bid to stay competitive
June 16, 2015 at 07:36 PM
2 minute read
Allen & Overy (A&O) has launched a full review of its pay structure for junior lawyers, with the firm bringing in external consultants to recommend options for change.
The review is expected to conclude before the end of July and all pay changes will be backdated to 1 May.
Legal Week understands that the firm is not ruling anything out at this stage, with the consultants believed to be looking at all possibilities when devising options for a revised pay structure. Changes could see A&O adjust the balance of base pay, bonuses and benefits.
One partner at the firm said: "It's all up for grabs. Our compensation overall is very competitive but it's sometimes difficult for an associate to compare what other firms offer."
A&O is the only magic circle firm yet to confirm its associate salary levels for this financial year.
Clifford Chance and Slaughter and May are the most generous payers at the benchmark newly qualified (NQ) lawyer level paying £70,000 a year in basic salary.
Freshfields Bruckhaus Deringer allows NQs to earn up to £77,000 a year but it operates a merit-based pay model that is not directly comparable with the other firms. Its minimum rate for NQs is £67,500.
Last October A&O upped the salaries it paid its junior lawyers, with NQ pay increasing from £64,000 to £66,500. On that occasion it also backdated the pay rises to 1 May.
The largest increases were reserved for those with two and three years' post-qualification experience (PQE), with both seeing salaries jump by more than 5%.
Two-year PQE pay rose from £78,500 to £82,500, while three-year PQEs had their salary bumped to £93,500, up from £89,000.
Rates at UK firms are overshadowed by many US rivals. White & Case has confirmed that it will pay UK NQs £90,000 a year, while the traditional Wall Street leaders have higher rates still.
In contrast Reed Smith has announced that its trainee salaries have increased to £38,500 for first years, a 4% rise on last year's £37,000, and up 3.9% for second years to £40,000. NQs have seen a 1.6% increase in their salary from £60,000 to £61,000.
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