DLA Piper has spiced up the ongoing pay war among the UK’s top national firms after unveiling a 19% salary rise for its newly-qualified (NQ) solicitors in the City but an increase of just 4% in the regions.
Legal Week can reveal today (22 June) that NQ lawyers at the transatlantic giant’s London arm will pocket £63,000 for 2007-08, up from £53,000 last year.
However, junior lawyers across the firm’s regional offices in Manchester, Leeds and Birmingham will initially receive a rise of just 4% to £36,500, up from £35,000 in the previous salary bands.
Meanwhile, solicitors at the firm’s Scottish offices in Glasgow and Edinburgh will pocket a rise of just 3%, to £33,000, leaving lawyers north of the border earning almost half as much as their counterparts in the capital.
The rises place DLA Piper behind UK rival Addleshaw Goddard, which earlier this month announced salaries of £64,000 and £40,000 for its NQ lawyers in the City and the regions respectively.
The aggressive benchmark set by Addleshaws sent a jolt through the UK’s regional legal market as firms outside London wrestle with the prospect of losing the best young lawyers to big-spending City counterparts.
It is understood Pinsent Masons has already promised its junior lawyers a significant pay rise this term. NQ lawyers at the top 20 currently take home £53,000 in London, more than 50% ahead of their colleagues in the firm’s regional offices, who earn starting salaries of £35,000.
DLA Piper is expected to ship in a further pay-rise for all its NQ lawyers in January 2008 to coincide with the start of its new financial year, which now runs from January to December. It is understood regional NQ salaries will increase to at least £39,000 as part of that rise.
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Are City lawyers worth twice as much as those in the regions? Have your say with the Legal Week Wiki 2007 salary special.
I think the guys in the regions at DLA have got reason to feel very, very annoyed.
Any word on trainee rises?
I think the big problem is the disparity in increases within national firms between London and regional lawyers and the message it potentially sends out to regional fee-earners. Irrespective of market conditions, you question your value to an organisation if your London colleagues are paid over 70% more for doing ostensibly the same amount of work. Addleshaws recognised that problem and dealt with it well.
The other problem with the London/regional divide is that national firms are at risk of only looking at the economic arguments and ignoring the impact on morale of adopting a two-tier approach to salary increases. Economically it makes sense to ring-fence London salaries in order to limit the cost of salary increases to the firm, but is there a limit to the extent to which non-London employees accept market-based arguments as a justification for a 70% disparity in rates of pay? Currently the disparity is about 50%, and I think that's a reasonable benchmark; not sure where the threshold is at which point regional employees consider moving to the City, but DLA must be getting near it.
Regional lawyers shouldn't be complaining. Nationally, house prices aren't going through the roof as they are in London. City associates tend to work longer hours and on more valuable deals. This reflects the fact that London is a booming financial centre and the regions are not. Their work is worth disproportionately more to the firm.
I am a trainee at DLA in the regions and although it is frustrating to hear of the London NQ starting salaries I also think that this article is misleading. Whilst we have been told that we will start on a salary of £36,500 we have also been told that this will increase on 1 Jan (in line with firmwide pay reviews) to "no less than £39,000". I think that the firm is right to ensure that NQs aren't being paid more than more qualified solicitors and for the sake of 3 months I'm happy to wait. Provided that others recieve similar pay increases I think that this was the right position for the firm to take - after all would DLA really want to send out the message that this years NQs are worth more than ones coming up to 1yr PQE? I know I would be pretty demoralised.
My experience is that lawyers in offices of national firms outside London work just as hard, and for just as long, as their London-based colleagues. There is a real danger of firms like DLA becoming very unattractive for employees in the regions - City hours, local salary!
Being almost 2 years PQE and on £39,000 in Leeds, I think Addleshaws have set an unrealistic benchmark in the regions. That said, our pay review year runs Jan-Dec so it may be that our reviews will take account of the hike.
I discussed this issue with some of the partners and the concensus is that DLA will pay top end of 'market rate'. What Addleshaws have done is to pay more than market rate - other nationals in Leeds don't seem to be biting.
What Addleshaws are going to be paying should become the market rate for the big 6 in Leeds. Pinsents have already said that they will be announcing 'substantial' pay increases in London and their regional offices. Let's hope the regional rises go as far as at least matching Addleshaws, or maybe even slightly higher so that the other regional firms realise that there is a new benchmark for regional pay.
DLA bod misses the point - Addleshaws aren't "paying above the market rate". They've just done what City firms have been doing for the last 12 months - come to the market with their best deal in order to position themselves at the top of the market and attract the best talent. The £60K+ NQ salaries in London didn't happen by accident - someone always has to move first and set the bar; the market repositions itself and other firms follow. Hopefully that's what Addleshaws have done in Leeds and Manchester.
Pinsents should come in just above Addleshaws if past experiences are anything to go by. Previously in the regions Pinsents paid more than their rivals. Any idea if the trainee salaries have gone up in the regions?
We were told clearly last year by management that in the regions, they would not review salaries until end of December to allow them to react to moves by competitors. London salaries are still increased mid-year so at the moment the City-region pay gap is huge in our firm. To justify the half a year wait, we now surely have to match Addleshaws (and others) in the regions from 1 Jan 08? On that basis, it's not such a bad time to be in the regions.
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