Amid rising costs of living on both sides of the Atlantic, combined with challenges in both hiring and retaining new talent, U.K. Magic Circle law firm Clifford Chance just increased the starting salary for newly qualified London-based lawyers to £125,000, or roughly $155,000 – plus bonuses. The move comes less than a year after the firm raised its starting salary to £100,000 from £94,500, making for a whopping 32% increase from start to finish, or about 2.5% per month.
Starting pay has been an ongoing battle between top U.K.- and U.S.-based firms for the past couple years, fueled by a paucity of legal talent, a ballooning demand for legal services, and a record number of merger and acquisition deals in 2021. Davis Polk & Wardwell, an international firm based in New York, is offering its new U.K. lawyers annual starting salaries of £160,000, or just under $200,000. Washington, D.C.-based competitor Akin Gump Strauss Hauer & Feld starts London-based lawyers even higher, at £164,000.
Sources suggest Clifford Chance’s latest salary bump was in response to Freshfields Bruckhaus Deringer’s April pay hike to £125,000. The former is the U.K.’s biggest law firm by revenue, while the latter is London’s oldest law firm. The remaining three Magic Circle firms offer slightly lower starting salaries, with Slaughter and May at £115,000 and both Linklaters and Allen & Overy at £107,500.
Just as in other industries, the bidding war for starting talent has left more senior staff feeling underappreciated, as their pay tends to stagnate. Some industry observers also worry the new lawyers will be severely overloaded with work in an attempt to justify their eye-popping pay, at a time when both workers and companies are placing ever-greater attention on that elusive thing known as work-life balance.