Which are the best paying law firms in the UK?
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While reputation, client lists and perception of future colleagues may be key criteria when considering which law firm to pick in the early stages of a legal career, the lack of transparency when it comes to remuneration makes it challenging to have a clear notion of how competitive these firms are when looking solely at pay. Thanks to hundreds of Associates using Emolument.com to benchmark their salary, we have been comparing earnings across the UK’s top law firms. One of our key findings is that some law firms, such as Latham & Watkins, the largest law firm by revenue globally, make a clear decision not to pay bonuses to their junior lawyers, but to compensate with large fixed salaries and that the market for Associates is highly inefficient with large gaps in pay from one firm to the next.
Best paying law firms – Magic Circle vs. Silver Circle vs. US firms : who offers the best pay?
Working for the Magic Circle is considered to be the legal professional’s golden ticket. It involves gaining experience on international high-profile cases, rigorous training when you first join but watch out for long hours.
Runners-up to the Magic Circle firms are the Silver Circle (SC). Can they compete with the Magic Circle and the biggest American law firms when it comes to pay?
MC: Magic Circle
SC: Silver Circle
Data based on 387 entries from Law Associates in London in 2015-2016
- Not so Magic after all? Magic Circle firms faces serious competition from both UK’s Silver Circle and US-based firms. Latham & Watkins (US), being the largest company by revenue globally(1), can afford to reward their employees with salaries 1.5 times larger than Magic Circle firms. Hogan Lovells, another US firm, comes neck-and-neck with Herbert Smith Freehills and Clifford Chance, Magic Circle and Silver Circle firms respectively.
- Pay without incentives? While in the financial industry performance-based bonuses are an important part of pay packages, lawyers’ pay is almost exempt from such incentives at Associate level. Only half of the best-paying law-firms pay bonuses, which account for a maximum of 12% of an Associate’s total annual pay.
- US firms: it’s all about fees : No bonuses are paid by US firms, surprising considering that across other industries, such as the financial sector, US companies are usually the most aggressive when it comes to paying bonuses.
Zoom-in on the Magic Circle
The Magic Circle (MC) is comprised of leading law firms in the UK known for selecting the best lawyers in financial and corporate law as well as billing the highest fees per lawyer. A fact which doesn’t stop huge pay gaps from one firm to the next.
Data based on 387 entries from Legal Associates working in London
- Worlds apart: with total compensation (salary + bonus) of at least £70,000 for Associates, Magic Circle firms offer salaries twice as high as the ones offered by smaller law firms (companies of less than 50 employees, who pay their Associates £38,000 per annum).
- Among the Magic Circle, highest revenues doesn’t equate to highest salaries : young lawyers applying to top Magic Circle firms are probably expecting to be offered the highest pay in the sector. However, revenue and pay appear to be decorrelated for Associates. For example, while Allen & Overy is the second largest firm by revenue out of the three mentioned above (2), offers the most competitive total compensation (£84,000), while Clifford Chance (first in terms of revenue) offers the lowest salary of the three firms (£70,000) with no bonus to top it up.
Best paying law firms
Alice Leguay, COO & Co-Founder at Emolument.com said: ‘Choosing to work for a law firm rather than internal legal counsel at a bank may have its drawbacks in terms of total earnings throughout a career but being paid in line with billed hours and level of seniority is a pragmatic practice which saves lawyers from the intense stress and paranoia endured by bankers obsessing about the opacity and volatility of bonus amounts. However, working as external counsel for banks is highly demanding in terms of hours and amount of work, often turning projects around overnight or at very short notice, in line with bankers’ demands, which prompts many lawyers to move to a career in banking, focusing on unpredictable but altogether higher bonuses.’
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