Trainee lawyers will start on a salary of £120,000 at City firm after it approved a massive 24% pay rise
A top UK law firm has increased its base salary for newly qualified lawyers by 24 per cent since December last year and will now pay its graduates £120,000 per year as soon as they are qualified.
The Anglo-Australian law firm, Herbert Smith Freehills, is one of the City of London‘s top ten highest-earning firms – and this is reflected in the significant pay rise for its newest recruits.
In December 2021 the firm took the decision to raise junior lawyers’ salaries by around ten per cent to £105,000.
But the new £15,000 pay rise, reported by The Times, eclipses the past rise – despite the Bank of England and financial experts calling on all companies to show restraint over pay rises due to the fear it could push inflation even higher.
‘It is key that we continue to attract the very best talent,’ said Alison Brown, the firm’s executive partner, who added that the practice wanted ‘to recognise high-performing lawyers at all levels’.
Herbert Smith Freehills is in the top ten highest-earning law firms in the City of London (pictured)
The Bank of England has increased its interest rate from 0.1 per cent to 1.25 percent since December 2021
In May governor of the Bank of England Andrew Bailey asked employers to show restraint over pay increases after inflation rose to a UK 40-year-high at just over nine per cent.
Inflation is expected to rise further to at least 11 per cent before it reaches its peak as working people struggle with the spiraling cost of living.
The Bank’s interest rate has increased from 0.1 per cent to 1.25 percent since December 2021.
The median average UK wage is currently £25,971, according to the latest available figures.
Herbert Smith Freehills is far from bucking the trend in its generous salary hikes in the City, but one of the UK’s top firms has introduced a pay freeze despite a price war in the so-called Magic Circle began in the UK, driven by increasing US salaries.
The Magic Circle is a term used to describe the top five London legal firms, all of whom specialise in corporate, rather than criminal law.
By comparison, criminal barristers starting out in the profession can be paid as little as £12,000 per year – although they can claim some expenses in addition to this sum.
Governor of the Bank of England Andrew Bailey has appealed for companies to show restraint in any pay rises, fearing they could push inflation higher
The city is home to the so-called Magic Circle – the top five UK banks based in the City of London
The term was first coined by legal journalists in the late 1990s, and for the past 15 years the member banks have been: Allen & Overy, Clifford Chance, Freshfields, Linklaters and Slaughter and May.
Allen & Overy has frozen pay for junior lawyers this year at £107,500 – but this does follow a significant rise last year.
A spokeswoman for the firm told The Times it was ‘a prudent decision based on a number of factors, including the more challenging business environment’.
She added that the firm would keep pay levels under review.
The highest-paying English legal firms based in the City for junior lawyers are Clifford Chance and Freshfields Brukhaus Deringer, an Anglo-German business, which offer starting salaries of £125,000.
The two remaining magic circle firms – Slaughter and May and Linklaters – pay starting salaries of £115,000 and £107,500, respectively.
But these pale in comparison to the amounts offered to new UK lawyers by US-based firms, which routinely offer much higher salaries than the majority of their UK counterparts.
Akin Gump, a Texas-based company, leads the way by offering more than £160,000 to UK lawyers from the day that they qualify.
The 24 per cent pay rise at Herbert Smith Freehills comes as the majority of the UK struggle to cope with rising prices and bills, on everything from groceries to energy bills and fuel.
Petrol and diesel prices continue to rise and hit new record highs. On Thursday, the average retail cost of petrol hit 191.4p while the cost of diesel rose to 199.1p.
The average UK car now costs more than £100 to completely fill with fuel.
Many working families have also reported using increasingly desperate measures to save money, including skipping meals or drastically cutting down on food spending.
Research by the Trussel Trust, an organisation that runs food banks across the UK, found in April of this year that one in ten parents was ‘very likely’ to visit a foodbank to help feed their children.
At the same time, a third of parents said they had skipped a meal in order to be able to feed their children.
The Trust operates more than half of the UK’s food banks and delivered 2.1 million emergency food parcels to families and individuals between April 2021 and March 2022.
Waves of strikes have already hit Brits hard and are set to continue after essential workers such as railway staff, junior criminal barristers and BT staff all threatened action this summer.
Junior doctors, postal workers and teaching staff are also considering going on strike.
Most of these professions argue their real income has gone down in previous years due to pay freezes or increases which do not match the rate of inflation.