Tightening Up – A&O NQ Salaries and Hammonds Profit Payouts
Allen & Overy has followed its Magic Circle rivals by slashing NQ salaries by £5,000 from £65,000, down to £60,000. Freshfields Bruckhaus Deringer and Clifford Chance previously cut theirs from £66,000 to £59,000 and Linklaters cut theirs from £66,600 to £61,500. In another cautionary financial manouver, Hammonds has changed its monthly drawing policy for partners to avoid the need for partners to pay back advance drawings which were over-generous. This is likely to see monthly drawings reduced to keep a …
Allen & Overy has followed its Magic Circle rivals by slashing NQ salaries by £5,000 from £65,000, down to £60,000. Freshfields Bruckhaus Deringer and Clifford Chance previously cut theirs from £66,000 to £59,000 and Linklaters cut theirs from £66,600 to £61,500.
In another cautionary financial manouver, Hammonds has changed its monthly drawing policy for partners to avoid the need for partners to pay back advance drawings which were over-generous. This is likely to see monthly drawings reduced to keep a more solid reserve and also takes account of the incoming increase in the tax rate for top earners to 50%. The firm previously held back 40% of individual partners’ monthly drawings for tax.
Read More Magic Slashing Salaries
Redundancy Watch: US Firms. Clifford Chance Salary Freeze.
June 4, 2009
Salary compression, just what I joined for.
Not.
June 4, 2009
better than no job at all
June 5, 2009
Time for Magic Circle babies to get theirs.
June 9, 2009
£5,000 off £65,000 is hardly slashing. It’s around 8%. One might say 20% is ’slashing’, which is the bitter pill that many solicitors in corporate and property departments at firms up and down the country are swallowing. If one joins a large City or US firm one must appreciate that those firms’ staff are more likely to be treated as disposable in a downturn. Furthermore, with a focus on aears which are most at risk in an economic downturn, it is inevitable that cuts at those firms will be more wide-ranging and damaging than those at smaller firms outside of the City of London.
June 10, 2009
Cuts/slashing whatever, it seems more drastic than it is because for many lawyers-to-be they have only observed NQ salaries increasing. Young entrants into the profession are going to have to accept that firms will use this opportunity to recover some of the ground they lost to junior lawyers in the last few years with wage inflation and will be less ready to relinquish it for some time to come.
June 10, 2009
My heart bleeds for the poor NQs who will only now be earning £60,000(!) on qualification. Its a hard life.
June 11, 2009
good point made by person at no.5, cynic. firms are using the current melee to clawback some lost ground. the danger is inequality at different PQE levels and likely resentment.