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Interim Market Report 2011 - Legal Salaries

Overview

There are two conflicting pressures within the legal recruitment market. There are skill shortages throughout much of the market and this should dictate rising salaries through the powers of supply and demand. Against this the economy is barely growing and real earnings are falling. Most employers in the legal recruitment market are torn between the need to attract and retain the best legal talent they can and the realities of a tough economic environment. Whilst it can be easy to break salary bands to recruit, it is less easy to deal with the dissatisfaction it might cause to existing staff.

We mentioned in the financial services section of this report that we believed that the average 15% salary increase achieved by lawyers moving within the financial services industry most likely represented a highpoint. After the brief post recession boom in recruitment, demand in the sector is now starting to lag. More typically salary increases for those in ongoing employment are simply matching inflation. After allowing for bonuses, which are expected to be considerably lower in 2011 than in 2010, there will be no real growth in earnings for lawyers employed within the sector.

In private practice, after an extended period where salaries were frequently frozen or only subject to token increases, they have now, in many practices areas, risen in real terms during 2011. As demand for legal services recovered the pressure on costs has relaxed. Salary rises are also necessary for law firms to retain their better, more junior lawyers. Competition for their services from the financial services industry and more recently commerce has grown. As a result, the disparity in salaries between practice and commerce is now growing thereby making the move in-house for some lawyers less attractive where a base cut is almost always likely.

Whilst all employers in the legal recruitment market are looking to provide salary packages that will attract and retain the best talent, real earnings in the wider economy are falling. Even if the legal profession is better placed than many other sections of the economy to withstand falling real earnings, and the pressure to increase salaries remain, it is not immune to developments in the wider economy.

The following is a rough guide only and post qualification levels are approximate.

Financial Services

Investment Banking

NQ £50,000 – £65,000
1-2 £60,000 – £85,000
3-4 £78,000 – £90,000
5-6 £85,000 – £103,000
7+ £95,000 +

Asset and Wealth Management

NQ£45,000 – £65,000
1-2 £60,000 – £80,000
3-4 £72,000 – £85,000
5-6 £80,000 – £95,000
7+ £86,000 +

Retail Banking

NQ £40,000 – £55,000
1-2 £45,000 – £70,000
3-4 £60,000 – £77,000
5-6 £70,000 – £85,000
7+ £80,000 +

Insurance

NQ £45,000 – £55,000
1-2 £50,000 – £70,000
3-4 £60,000 – £82,000
5-6 £70,000 – £85,000
7+ £80,000 +

Commerce

NQ £40,000 – £50,000
1-2 £50,000 – £56,000
3-4 £64,000 – £70,000
5-6 £78,000 – £83,000
7+ £88,000 +

US Law Firms

NQ £70,000 – £94,000
1-2 £82,000 – £104,000
3-4 £97,000 – £116,000
5-6 £110,000 – £130,000
7+ £115,000+

Magic Circle Law Firms

NQ £60,000 – £61,500
1-2 £68,000 – £78,000
3-4 £85,000 – £94,500
5-6 £89,000 – £105,000
7+ £94,000

Silver Circle and Top City Law Firms

NQ £52,000 – £65,000
1-2 £58,000 – £78,000
3-4 £67,000 – £88,000
5-6 £85,000 – £95,000
7+ £90,000+

West End Law Firms

NQ £40,000 – £53,000
1-2 £50,000 – £63,000
3-4 61,000 – £73,000
5-6 £75,000 – £90,000
7+ £85,000

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