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Slaughter and May has said it will not raise salaries for its most junior lawyers this spring, in a sign that a fierce war for legal talent in the City may be cooling for the first time since the Covid pandemic.
Slaughters, which advises some of the UK’s most valuable companies, said it had decided to keep base salaries for its newly qualified solicitors at £150,000 following the first of its twice-yearly associate pay reviews.
The move comes as its “magic circle” rivals — which typically review pay levels at the end of the financial year — are waiting to see what each other does at a time of greater market uncertainty and following steep rises in recent years, according to people familiar with the matter.
A decision by Slaughters not to raise pay for its newly qualified lawyers either now or in November would mark the first time since the Covid-19 crisis that the firm has not increased junior lawyer salaries, following a sharp escalation in rates in recent years.
Intense competition between the City’s top law firms and deep-pocketed US rivals, combined with healthy dealmaking volumes, drove remuneration for freshly qualified “magic circle” lawyers from about £100,000 in 2019 to £150,000 last year.
But this year lower dealmaking volumes resulting from Donald Trump’s US trade war, along with higher salary costs following sharp increases in recent years, have the potential to act as cooling factors on the pay war.
“There does seem to be a sense of law firms waiting for someone to move first,” said Ria Karnik, a managing director at legal recruiter Major, Lindsey & Africa. This may be “partly due to demand not requiring a move on NQ salaries . . . If it does happen [it will be] more of a “keeping up with the Joneses’” situation.”
London-based “magic circle” firms, including Linklaters and Freshfields, announced 20 per cent increases to base pay for newly qualified lawyers to £150,000, effective May 1 last year, in what became a salary bonanza for junior lawyers.
The moves were an attempt to compete with US peers such as Quinn Emanuel in London, which has been poaching young lawyers from the best UK firms in the capital and upped its own pay to as much as £180,000 in 2024. This year no top City firm apart from Slaughters has disclosed its new pay levels.
Following the large rises in 2024, Slaughters opted to increase its newly qualified lawyer pay to £150,000 in September, and has increased NQ pay every year since 2021. It was among a number of top firms to take the rare step of cutting rates in 2020, in moves triggered by the onset of pandemic.
