According to a salary survey released earlier this week, continued uncertainty in the eurzone has forced business law firms across London to adopt a conservative approach to salary reviews.

Salary freezes

The research – conducted by recruitment consultancy GMK and published in the newspaper Legal Week – maintains that leading firms have generally frozen newly-qualified rates at around the £61,000 mark. The exception, according to the researchers, is Anglo-German magic circle player Freshfields Bruckhaus Deringer, which is doling out pay packages of some £65,000 to lawyers on the first rung of qualification.
‘More firms are moving away from the traditional associate lockstep model to a merit-based associate development path,’ says the report. It goes on to say that some firms are ‘adopting a hybrid system, which becomes more merit-based with seniority’.
Nonetheless, remuneration at the top London firms continues to rise fairly steadily for those lawyers sticking with the firms for several years. Pay packages for five-year post-qualification lawyers at the large firms ranges between £87,000 and £107,500.

Flash New Yorkers

But it is the London offices of New York-based firms that continue to push up the market generally, with salary rates considerably higher than their purely English counterparts. Newly qualified rates at the branches of Big Apple firms range between £92,000 and £100,000, while five-year-qualified lawyers can expect to haul in between £132,000 and £162,000.
Also propping up London salaries is the re-emergence of the banks into the market, with their in-house legal departments often outbidding even the New York players, according to the survey.
One area where salary stagnation has hit hard, according to the researchers, is the professional support lawyer sector. Demand for non-fee earning lawyers has tumbled since the onset of the global financial crisis, and currently entry level support lawyers at the top London firms command salaries of about £65,000.
However, team heads and senior level support lawyers can earn up to £130,000 annually, while remuneration packages for heads of knowledge management can vary widely, with the researchers maintaining some can bag as much as £250,000.