A new year: will 2014 see financial rewards for solicitors?
Firms across the UK recently closed the books on 2013-14; a new financial year brings revised strategies and fresh targets but will it also see increased remuneration for legal advisers?
Whilst each firm is individual in its salary structure, it is still commonplace for businesses throughout the industry to band pay according to experience. As many firms consolidate following year end, this is the ideal opportunity for both employers and employees to commence pay and reward discussions.
How does your salary compare to the marketplace?
Our research reveals an overwhelming view that 2014 will see salary increases and increased business activity. Indeed, we are already seeing the top end of salary brackets creeping upwards this financial year. All practitioners are reporting greater workloads and it is clear from the instructions we are receiving at the moment that there are personnel requirements across all sectors. Following a steady economic growth in 2013, with new business peaking in the final quarter of the year, firms are looking to recruit heavily at junior level and we have recently received instructions from several top-20 practices looking for newly-qualified solicitors and associates up to around 5-year PQE across many commercial practice areas including Banking and Finance, Real Estate and Corporate. This ‘spike’ in junior recruitment can likely be explained by the limited opportunities for trainees and NQs over the last 5 years; firms are becoming more top-heavy and need to rebalance their teams.
With such demand, of course, comes a much more competitive salary market. Since 2008, salaries have increased very little; an NQ at a medium-sized firm in the north-west at the outset of the recession could expect to receive a starting salary of £32,000 and only now are we seeing this rise to an average of around £35,000.
Generally, associates should look to achieve approximately an additional £3,000 for each PQE year they gain; the market average salary for an associate with 5 years’ experience is currently around £45,000, rising to £55,000 for larger practices.
As associates progress up the career ladder, again it should be expected that salaries rise in line with experience. At partnership level, salaries and drawings are still very much results-led but at a small-to-medium sized firm, a salaried partner could expect to receive around £80-90,000 (though again this is rising further as a result of capital injections, thus adjusting the risk-to-reward balance). At a large firm, this increases to £160,000.
Bonus payments at law firms are less common than in other professions; research shows that banking, accountancy, IT and marketing generally award bonuses far more frequently and at a greater level than the legal industry. However, more lawyers now expect to receive bonuses following a busy 2013-14.
James Farry, consultant at QC Legal, comments:
“We have noticed a considerable upturn in market confidence over the last twelve months; firms need to be able to justify recruitment, especially at junior levels where new joiners are rarely expected to bring a following, and our clients are telling us that they are sufficiently busy across all commercial practice areas to require the support. Salaries are still taking time to catch up but 2014 should see a re-balancing at firms which started to experience positive growth towards the end of 2013. A potential shortage of NQs and junior lawyers may mean that this level in particular becomes very competitive, and candidates are quickly becoming wise to this fact when tabling their expectations. Similarly, firms are initiating salary reviews (or tabling aggressive counter-offers) to avoid losing their best lawyers to their rivals purely on the basis of remuneration.”
We want to hear from you! Will you receive a salary review or bonus this year? Are financial rewards increasing in line with market growth and confidence at your firm? Drop James a line in confidence at email@example.com or send us a DM on Twitter (@QCLegal).
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