For someone whose salary has nearly tripled, Kavi Shah is fairly nonchalant. The 25-year-old has just been promoted from a trainee lawyer to an associate at the London firm Linklaters, and in the process seen his £55,000 pay jump to £150,000.
It puts Shah, a Londoner four years out of university, within touching distance of the top one per cent of earners in the UK, earning even more than most investment bankers can expect to at his age.
“Ultimately, it’s a very privileged position to be in,” said Shah, who specialises in advising on corporate mergers and acquisitions and private equity.
A war for talent has erupted across the City’s top law firms, which has allowed juniors not long out of college to take home bumper pay deals. Freshfields Bruckhaus Deringer fired the starting gun, announcing that it would be raising the pay of its recently qualified employees to £150,000 in early May. Shah’s bosses at Linklaters had little choice but to follow suit.
Freshfields and Linklaters are two of the “magic circle” of London law firms. Seen as the cream of the British legal crop, for generations they have been able to scoop up the brightest graduates, grateful to join such prestigious institutions.
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But over the past decade, big US firms have arrived in London to compete. With them come enormous, US-style pay deals that have forced the hand of their magic circle rivals.
US firms still tend to pay more. In what is becoming an annual ritual of telephone-number pay rises, Quinn Emanuel Urquhart & Sullivan this month raised junior pay to £180,000.
One former senior partner at a UK firm said that, of the magic circle firms, Freshfields was “always” the one to start it off. “They have a big US practice so they have to show that they’re competitive with those big-paying American firms. The rest of us would try to hold the line but one always loses their nerve and then everyone has to follow.”
The trade off for these twentysomething lawyers is ungodly work schedules, he said. “It’s a Faustian pact. The magic circle is tough but at US firms, they get beasted.”
Trainees can expect to work 18-hour shifts regularly if they are on a deal. Jaysen Sutton, who joined US firm Weil, Gotshal & Manges in 2017, recalled: “You kind of know what you’re getting into. It’s like ‘I’m going to be paid really well, but I’m going to give up my life to just work these hours’.”
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Sutton quit the legal rat race and now runs The Corporate Law Academy, an educational website for budding lawyers. He recalled that, on a good day he would be in the office from 9am to 9pm, while on weeks where a big deal was about to close, he could be leaving his desk at around 3am.
Visit any big law firm in the late hours of the night and you will invariably see a fleet of Deliveroo couriers dropping off takeaways to fuel the lawyers toiling inside. Shah said calling in takeaways with your colleagues is a chance to unwind during a deal. Sutton recalled how he used to opt for Huel meal replacement shakes. Most big firms are also equipped with showers and beds to keep staff fresh during the graveyard shifts.
Alex Gerbi, Quinn Emanuel’s London co-managing partner, said. “We do complex and high-stakes work. We help our clients, be they governments, companies or individuals, with their biggest — usually international — disputes. The reality is that these cases do not switch off at 5pm, or because it’s August. This is the most challenging work in the market, and to do it to the best of one’s ability requires a big commitment of one’s time.”
So what does it take for a 25-year-old to land a £150,000 a year job at a City law firm? Surprisingly, not necessarily a law degree.
Malcolm Horton, who leads recruitment for Linklaters, said that law degrees were useful but did not include all the practical skills necessary to be an effective lawyer. Instead, he said, budding lawyers should be good communicators, able to argue a case effectively; good writers, who can draw up contracts clearly; and analytically minded, so that they can dissect documents. As such, the profession remains dominated by humanities graduates, but he is keen to bring over more mathematicians, too.
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“I’m a big fan of Stem [science, technology, engineering and maths] graduates in law. If you think about the banks that we work with and the complex derivatives that we write contracts for, you need someone with those sorts of skills,” he said.
Savvy youngsters with an eye on the prize will apply for unpaid internships during their university holidays to get a head start. These vacation, or “vac” schemes last two weeks, and will see partners give seminars and interview aspiring lawyers to see if they are up to the job. “They take you for a lot of lunches to charm you but are secretly interviewing you the whole time,” said one young lawyer.
The lucky few who are taken will then attend a law course, usually funded by the firm, followed by two years of on-the-job training.
The course is generally one year for law graduates and two years for everybody else. Firms may offer a stipend of perhaps £10,000 a year so most have to rely on their parents, or working bar shifts, to get by.
If they pass the exams, they become a trainee for two years and can expect to be paid £50,000 to £60,000 at the top firms, where they will be rotated around the different sections. It is here that the lawyers are first exposed to the gruelling hours that fuel the trade.
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One magic circle veteran said: “They’re of bugger-all use to anybody at first so it’s crazy money, really. You can only really give them grunt work to do.”
After another round of exams to become accredited solicitors, trainees will become “associates”, when the pay suddenly shoots north of £150,000.
The leaps in salary for such young lawyers in recent years can cause consternation among many older colleagues, because pay often does not accelerate particularly quickly. One senior magic circle veteran said: “Older lawyers look below them and think: hang on, how come this newly qualified kid is getting paid almost the same as me and I’ve been here five years?’”
However, in some cases US firms have been driving up the pay of more senior lawyers too, as they poach staff from the magic circle.
Shah, who was just made an associate in March, has not received his first pay cheque yet, but plans to spend it sensibly on a deposit for a property to move out of his parents’ house. Maybe it is not so much like investment banking after all.
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‘The hours are long and clients expect us to be available 24/7’
Jill, a 27-year-old lawyer at a US law firm in the City of London, says: “You might think that being paid an annual salary of £160,000 just three years out of university would be like winning the Lottery. In many ways, you’d be right.
“In my second year at Cambridge I applied for a job at a top law firm, which I selected solely on the fact that they paid their trainees the most. At uni, I worked a vacation scheme, which is a bit like a summer internship, and after graduating I had to complete a postgraduate qualification called the LPC, or Legal Practice Course, which the firm paid for and also gave me a £12,000 stipend to complete.
“After the LPC, my starting pay was £55,000, which almost tripled after I qualified from the two-year training scheme. Now, I’m 27 and I’m being paid £205,000 a year, which doesn’t include the free breakfasts, dinners, health insurance and £200-a-month gym allowance.
“The weirdest thing about earning this much is being able to buy nearly anything I want, which is a very alien concept to me. I don’t have to think twice about eating at an expensive restaurant, and last year I bought a £3,500 Cartier watch on a whim. One of my colleagues bought a Porsche on finance in his first year after qualification.
“It must be said that the hours are long and clients expect us to be available 24/7. When I’m working on a multibillion-dollar deal, I’ll be lucky to get more than a couple of hours sleep a night for weeks on end. Some colleagues have even told me about riding the “magic roundabout”, where a company taxi drives you home and waits outside while you shower and change before heading back to the office to do it all again.
“And don’t ever think about quitting — even if you’re burned out. A salary like this can quickly become golden handcuffs. My social circle has become populated almost solely by people with similar pay, and my mortgage and lifestyle makes it almost impossible to leave this job.
“I don’t expect anyone to break out the tiny violin for me, and although I do give generously to charity, I often feel guilty thinking about the nurses and doctors who work just as many hours as me for far less money. It’s not up to me but, if it were, there would be much less of a disparity.”
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