The birth of the £200K NQ!
£200K will undoubtably soon be breached. I posted my prediction (that it will happen in 2025) a year ago on LinkedIn, the milestone is fast approaching and my prediction looks well on track!
Interesting that rising associate pay is juxtaposed with quiet layoffs happening in big law, due to “challenging market conditions” (presumably cast-iron NDAs are in place to stop us learning more). Meanwhile the official justification for raising associate pay is the “war for top talent”. To my knowledge there’s been no noticeable change in the supply-demand dynamic of associates this year!
Is it just me? The notion of challenging market conditions running parallel to a war for talent seems ridiculous.
The truth is rising associate pay is largely disconnected from supply and demand constraints. Instead it’s part of a larger game multi-millionaire partners at prestigious firms play with one another; a kind of “my Patek’s better than yours!”
At the very pinnacle of law firm hiring a small differential in salary might occasionally sway the very best candidate to one firm or another, however I’d argue this is not the primary use case for the observed pay rises!
Why does it matter?
It doesn’t matter in isolation, no more than the house price of someone who committed a crime matters in a newspaper article. £200K is a flashy, headline grabbing number, and the only reason firms are inching toward it rather than leaping over the line for ultimate prestige is the wider cost of living crisis and the resulting bad vibes they’d attract from those outside the profession.
CEOs in Manchester being paid less than 23-year-olds in London working their first day as a qualified lawyer might be amusing to you, it is to me… But probably not to someone outside the London law bubble who’s struggling to make sense of it all through official sources.
Numbers matter when they’re contextualised. Private school, Oxbridge educated murderers in nice houses for example should have a higher moral standard than the hoi polloi. I’ve been receiving this implicit message on repeat from the MSM for years so it must be true!
When you contextualise associate pay with in-house lawyers pay things start to get really dicey. While magic circle firms set their comp to auto-raise, staying X% behind the leading US players each year, lawyers working for companies do not benefit the same way.
Unless companies raise in-house legal salaries dramatically, unlikely, or law firms reduce associate pay, impossible; we might return to a two-tier system of practicing law. In-house lawyers will once again be sneered at by law firm lawyers who sold their soul for $$$ and nobody wants that… do they?