Hello and welcome to the Fides Weekly Update. Take a look at this week’s key trends, moves and developments in legal and compliance.
Tweet us @Fides_Search to let us know your thoughts.
1. War for Talent: NQ Salaries on the rise
The war for talent further intensified this week as Clifford Chance became the fourth Magic Circle firm to unveil associate salaries for 2016-17.
The firm increased maximum pay by £1,000 for newly qualified (NQ) associates, hiking base salary to £85,000 plus a fixed bonus if individual development goals are met. This matches the NQ base salary at Freshfields, and offers more than the average pay and bonus for NQ lawyers at Linklaters.
As well as a salary uptick for associates with one year’s post-qualification experience (PQE) – from £90,600 last year to £95,000 – the firm also introduced changes to the base salary and variable bonus for 2 and 3 PQE solicitors depending on their contribution to the firm. Mirroring changes implemented in senior associate pay at Slaughter and May in 2013, those making a ‘good contribution’ can expect to earn a combined base salary and bonus of £100,000 at 2PQE and £111,000 at 3PQE, whilst those making an ‘excellent contribution’ are set to receive an average pay rate of £119,000 and £130,000.
Table: Magic Circle Associate Pay, 2016-17
|Firm||Conditions||Trainee||NQ||1 PQE||2 PQE||3PQE|
|Clifford Chance||Base Salary||£43,500 (Y1)
|£85,000 (+fixed bonus)||£95,000||£100,000 (Good)
|Freshfields Bruckhaus Deringer||Base Salary||£43,000 (Y1)
|£85,000 – £97,500||£85,000 – £97,500||£105,000 – £115,000||£105,000 – £115,000|
|Slaughter and May||Base Salary||£42,500
|Base Salary + Median bonus||£42,000
Despite this, Freshfields still offer the highest base salary for NQ associates as it announced a 26% uplift on NQ salaries this year from £67,500 to £85,000. Newly qualified and 1PQE associates sitting in the firm’s career milestone foundation (CMF) band can expect to receive a base salary of between £85,000 and £97,500, but will not be eligible for a bonus. Lawyers at 2 and 3 PQE, who also saw their salaries rise substantially to between £105,000 and £115,000 up from £87,500 to £100,000, are eligible to receive a bonus of up to 20%.This rise in associate salaries follows a firm-wide freeze in salary bandings last year.
This was accompanied by a more modest increase announced in base salary at Slaughter and May, with NQs receiving a pay rise of 2% to £71,500 and 1PQE lawyers receiving a 4.6% salary hike to £79,000. Linklaters on the other hand announced that a basic salary combined with median bonus for average NQ lawyers and 1PQE associates will stand at £81,000 and £90,000, although high performers can expect to take up to £91,000 and £101,000 respectively.
Pressure on the magic circle to increase NQ pay and capture upcoming talent comes from competition by US firms in London. In April, Sidley Austin increased the salary of all London associates to at least £100,000 to match Kirkland & Ellis’ London rates after acquiring a team of six partners and 14 associates from the firm. In December, Vinson & Elkins became the latest firm to join the ‘100 club’ as it boosted NQ pay by 25% from £80,000 to £100,000. Other firms offering these levels of associate pay include Sullivan & Cromwell (NQ salary: £101.5k), Latham & Watkins (£101k), Akin Gump (£100k), Davis Polk (£100k) and Weil Gotshal & Manges (£100k).
Whilst it is clear associate salaries are on the rise across the City, only time will tell if the Magic Circle and other UK firms can balance their bandings to repel the continuing US encroachment into the London legal market.
2. A glance into the Swiss legal market
Attention has turned to the Swiss legal market over the last few weeks as it was reported Quinn Emanuel and Charles Russell Speechlys have both made advancements in this market. With Quinn Emanuel opening an office in Zurich and Charles Russell Speechlys making three partner hires in Geneva, is the Swiss market gaining global law firm interest?
Quinn Emanuel announced last week they have opened their eighth European office in Zurich by relocating London-based white-collar and corporate investigations partner Thomas Werlen, making them the second US firm to launch a Swiss legal offering this month after Curtis Mallet-Prevost Colt & Mosle opened in Geneva. Additionally, Charles Russell Speechlys made three hires in Switzerland with corporate partner Olivier Cavadini from Python & Peter as well as criminal law partner Bruno Ledrappier and family law partner Grégoire Uldry, both joining from Borel & Barbey.
International firms don’t have much of a presence in Switzerland as they do in other European jurisdictions. The only solid international offering comes from Baker & McKenzie, who are highly regarded across a number of practice areas, whilst CMS, Eversheds and Sidley Austin are also noted for certain capabilities. This in turn suggests that movement is minimal, but areas with the highest number of lateral moves are corporate/M&A and litigation. Eversheds in particular have enhanced their Swiss offering over the last year, hiring corporate partners Daniel Bachmann, Gerald Brei and Urs Reinwald from EY, Homburger and Lenz & Staehelin respectively. White & Case also made a high-profile Swiss hire last September when Anne Véronique Schlaepfer joined the firm as their first Swiss arbitration partner. She joined from leading Swiss firm Schellenberg Wittmer, where she served as their co-head of arbitration.
The gradual influx of international law firm activity could be attributed to their changing banking landscape. With increasing transparency in Swiss banking law, the market is witnessing a rise in the number of cross-border deals, whilst the changes being made to Basel III regulation has also brought about a steady increase in regulatory and compliance work. Although this has made the market more attractive and opened it up to international players, it still holds a number of barriers to entry. A key hurdle for international firms is gaining a strong client base. Newcomers to the Swiss market find it difficult to gain reasonable market share, as clients are focused on maintaining long-term trusted relationships already built with domestic firms.
Since a new unified code of civil procedure was introduced in Switzerland in 2011, which led to all 26 divisions in Switzerland operating under the same civil procedural law, it has provided foreign law firms with an incentive to set up in the region and further extend their multi-jurisdictional presence. The Swiss legal market has indeed proved to be a slow burner, but the potential for business is evident, and levels of activity and sizeable deals continue to become more prominent. It is therefore likely that we will see continued advances from international firms in this small but not insignificant market.
Movers & Shakers of the Week
Ashurst makes a number appointments as part of new management structure
Simon Beddow has been named Ashurst’s first London managing partner, whilst other partners across the firm also joined the Ashurst’s management team
BAT choose new head of legal
Formerly head of regulatory and corporate affairs for Western Europe, Benoit Belhomme has been made British American Tobacco’s head of legal and external affairs as well as regional general counsel for Western Europe
Ashurst appoint a strategic director of corporate lending
Former lawyer Dave Rome has left RBS as their head of EMEA loan markets to become strategic director of corporate lending at Ashurst
Coca-Cola European Partners gain new GC
Clare Wardle picks up general counsel and company secretary role at Coca-Cola European Partners. She was previously group general counsel for Kingfisher
Deutsche lose legal chief and head of active asset management
Emma Slatter, global head of strategy for legal, and James Hooper, head of active asset management, have both left Deutsche Bank this week
Lathams gains leading arbitration partner from US rival
Latham & Watkins has hired arbitration partner Sophie Lamb from Debevoise & Plimpton to sit in their London disputes practice
Norton Rose take on Sidleys’ US public finance team
The whole US public finance team of Sidley Austin has moved to Norton Rose Fulbright, sitting in San Francisco, New York and Washington. the 17 lawyer team includes six partners: Larry Bauer, Matt Hughey, Peter Canzano, Jerry McGovern, Eric Tashman and Cliff Gerber.
Milbank partner joins one of the Big Four
Partner Laetitia Costa departs Milbank, Tweed, Hadley & McCloy to join PwC Legal as their head of banking & finance in the City
A&O adds to global IP practice
Marjan Noor has left Simmons & Simmons to join Allen & Overy as a patent disputes and regulatory partner
KWM loses German IP partner
IP and IT partner Manuela Finger departs King & Wood Mallesons’ Frankfurt office to join Gowling WLG in Munich
Hogan Lovells builds out Asia capital markets team
Hogan Lovells has added Paul Hastings’ Hong Kong office head Sammy Li and DLA Piper’s head of US capital markets Stephen Peepels to their Hong Kong office