Should You Follow the Money?

Purple briefcase
Next City Lawyer
April 15, 2022
[time to read]
min read

We're often asked whether we think the increased salaries paid by the leading US law firms in London mean that it makes sense to specifically target American firms when you first apply for vacation schemes and training contracts, rather than Magic Circle, Silver Circle or other city law firms. In this guide, we set out our advice on whether it makes sense to move, when to pull the trigger and other factors to consider.

Contents

  1. Ignore the pay war as a trainee
  2. The things that actually matter
  3. When to follow the money
Chart showing training contract salaries by type of firm

Ignore the pay wars as a trainee

There’s a lot of focus on trainee salaries among candidates.  But the truth is, it’s pretty irrelevant what you earn as a trainee: the real difference between City firms emerges on qualification.

Chart showing average salaries for newly qualified lawyers in London by type of firm

In fact, the team at Next City Lawyer think you should ignore the noise about salaries altogether when applying for training contracts.  In the current post-Brexit, post-COVID legal market, the goal should be to get any training contract.  

The things that actually matter

If you’re able to be picky, choose the firm with the best brand name and reputation.  You don’t know where your career is going, but it makes sense to start at the best firm you can. Candidates often undervalue themselves and this is a mistake.

We think full-service firms are the best to train at.  How do you know that you want to be a finance lawyer if you’ve never worked in any other department?  Is a fortnight stint in a department during a vacation scheme sufficient grounds for deciding the rest of your career?  You can guess what we’d say. In fact, we estimate that c.75% of City law associates end up qualifying into a different team than they would have expected when they started their training contracts. This was even the case for all of the Next City Lawyer founders!

For that reason, there are a lot of US firms that we wouldn’t recommend candidates train at.  Some US firms genuinely offer full-service department choices to their trainees.  But you are taking a massive risk by choosing, say, Sullivan & Cromwell over Freshfields.  Sullivan & Cromwell gives you the choice of six, similar-ish practice areas, which are mainly focused around (1) public and private mergers and (2) finance.  As a Magic Circle law firm, Freshfields offers a massive choice from 20 different departments, plus the flexibility of three month seats and interesting secondments. This variety is simply very helpful for junior lawyers to see.

Culture matters too.  But culture depends entirely on your team.  It’s created by the partners who lead those teams.  If the partners are amiable people they look to hire similar people as associates, who then in turn become the next generation of trainee supervisors and partners.

When to follow the money

As the chart above makes clear, the difference between salaries for NQ solicitors is massive.  But that doesn’t mean you have to train at a US firm in order to reap the rewards.  In practice, every qualified lawyer that we know who trained at a reputable UK firm, qualified into a mainstream practice area and who wanted to move across to a US firm was able to do so with relative ease.

We think it makes sense to consider moving to a US law firm on qualification.  It can be especially fruitful to target law firms that do not have trainees, as they are always going to be needing fresh NQs (e.g. Simpson Thacher; Pallas Partners). Too many of our peers stayed at the city law firm or global law firm that they trained at out of inertia or fear of something new, worked nose to the grindstone for a few years anyway at lower pay than they deserved and then eventually moved to a US firm anyway at 2 or 3 years’ PQE.  That approach carries a significant opportunity cost in terms of lost earnings.

The idea that all US firms are sweatshops is a cost-saving myth spread by UK City firms.  The reality is that working hours will probably be the same at most US firms as the Magic Circle and the leading Silver Circle firms, especially in transactional departments like corporate and finance.  Corporate lawyers will always work hard.  US law firms frequently work opposite Magic Circle and Silver Circle law firms.  It follows that the hours are similar for both sides on the same transaction.  

In short, you should do your own research, look part stereotypes and not assume that the hours in Magic Circle or leading Silver Circle law firms are likely to be substantially less than at US firms.

Newly qualified salaries at US firms (2019)

You can learn more about how we can help you secure a training contract here.  

  • Our Application Database has >95 examples of successful applications for >70 different law firms for £14.99 each. Each application includes expert line-by-line commentary by our team of qualified solicitors from US, Magic Circle and Silver Circle firms to help you craft your own perfect application and secure a training contract.
  • Our Practice Case Study will help you turn your assessment centre into a training contract offer. This realistic mock case study takes 45 minutes to complete. It includes >15 pages of expert feedback which will teach you vital commercial content that you need to know and help you to assess how strong your practice performance was.  It costs just £19.99.
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