Lawyers' bonanza as US firm hikes pay

Recruiters predict `salary warfare' to attract the best young minds

With newly qualified solicitors now able to earn as much as pounds 45,000, legal experts are predicting "salary warfare" in the battle by companies to attract the best young lawyers.

The US company White & Case has recently raised the pay of its solicitors in the London office to bring it into line with the salaries earned by its American lawyers. Legal recruiters, however, say the move will lead to an exodus of talent from the regions, where average salaries are much lower,and have condemned White & Case's decision as "aggressive".

The White & Case recruits will be earning pounds 17,000 more than the London average of pounds 28,000. Bernard Nelson, senior partner at White & Case in London, denied the pay-rise was made to poach the best people. "The principal reason was to reduce the disparity we saw between our English solicitors and our US lawyers," he said. "We are a multinational practice but our US lawyers were being paid on the US scale, which was significantly higher than the British one. The lawyers were doing the same work and we felt it wasn't justified."

But Anthony Tomkins, founder of the leading legal recruitment firm, Charles Fellowes Partnership, said: "You can earn pounds 22,000 in Birmingham if you are a high-flyer. Then you see your chum in London who can get over double that. There has been an acute shortage of good quality lawyers this year. White & Case has taken a very aggressive stance.

"The increase in prestige and growth of firms outside London means that companies outside the capital now compete with London-based firms. But paying their solicitors half the London salary is something that cannot be sustained. In the long term it will have an effect."

Terence Kyle, managing partner of Linklaters and Paine, a UK international law firm which recruits 120 solicitors each year, said that his firm was paying pounds 28,000. "You can put up salaries to compete, but there is a trade-off. The reality is that White & Case are having to offer an incentive to get the good entrants to join them. On the other hand, such a large premium over the normal means it is something we will have to give hard thought to," he said.

Melvyn Hughes, executive partner of Slaughter and May, another large City law firm, agreed: "If other American law firms also start recruiting at this level, the City firms may well feel that they have to respond."

But Richard Fleck, responsible for international business at Herbert Smith, one of the main City law firms, said he would be "very surprised" if the big companies followed White & Case's lead. He also warned that new solicitors could find themselves under increasingly harsh pressures of work because of their huge premiums.

But David McNeill, of the Law Society, was anxious to dispel the notion that all solicitors were being given huge pay packets: "The perception is that solicitors make a great deal of money. Those who do are in a relatively small number of firms. For a newly qualified solicitor, the average across the country is between pounds 19,000 and pounds 28,000.

"But I think it's an inevitable consequence. At the end of the day, all law firms are business-oriented and you have bring the money in. From the media coverage you might think legal aid solicitors are coining it. In reality, a newly qualified solicitor in a legal aid firm will be lucky to make more than pounds 20,000 for a 55-hour week."

No doubt this news will be a great consolation to the junior hospital doctor earning just pounds 14,880, the schoolteacher on pounds 13,866, and the young police constable notching up pounds 14,916. Even MPs, having negotiated themselves a 26-per-cent pay rise this year to pounds 43,000, cannot match - on basic pay - a White & Case solicitor.

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