Salary bunching and “outliers” in East Anglia 

If your firm’s published newly qualified (NQ) salary is £45k, at one year post qualification experience (PQE) your salary might be £47k. At three years’ PQE £50k. This is “salary bunching” – when salaries are close together. 

Even with significant effort, such as billing well and supervising juniors, salary increases are often minimal beyond the jump at NQ level. To many lawyers this is disappointing. The expectation is that salaries will rise more rapidly. Yet often it’s by a grand or two for each year of PQE beyond the firm’s published NQ rate. 

Further, in many firms, there is not a huge difference between what a salaried partner and a senior associate take home. Again, this can come as a shock. 

So why don’t salaries rise much for each PQE level? The answer is – sadly – that they don’t have to. Unless law firms are facing serious retention issues and struggling to replace departing lawyers, there’s no need to up salaries significantly. 

There have been some bigger salary jumps recently with inflation being high but these will be reined in as inflation falls.

Also, work from home trends (in particular fully remote associate lawyer jobs) put pressure on regional firms but now this is easing with lawyers required to be in the office more days a week. Hybrid roles are not as attractive to a regional lawyer as a fully remote role. 

Where you find salaries bucking this trend is where recruitment and retention is a big problem. Regionally, this tends to be in small firms or in businesses with one or two legal counsels which the firm is really reliant on. Or – in niche profitable practices such as tax, pensions or construction. This is what we term an “outlier” – someone on a salary much higher than any so-called “market rate”.  

You can also find lawyers on much higher salaries in firms operating a “meritocratic” salary structure. This is where pay is aligned with performance, rather than PQE. In a firm with a meritocratic salary structure you might have a corporate lawyer doing multi-million pound transactions taking home more than their private client colleague who’s the same PQE level. It’s because the corporate lawyer is billing more. You tend to find meritocratic law firms in areas surrounded by fierce competition. In a meritocracy, often the NQ salary is “undisclosed”. 

Interestingly, by 3 years’ PQE, the “best” performing lawyers in meritocratic firms are often taking home more than their friends in the firms with the highest NQ rate for the area. So what was once a gulf in salary at NQ level has closed. 

How lawyers’ pay increases is one of the biggest ways law firms differentiate themselves. It’s a question the bright and curious lawyers always want to know about.

Disappointed with your payrise? Want to be that outlier described above? Get in touch to find out who’s hiring and how you can navigate the system.

You can contact us anytime of day on:

info@olsenrecruitment.com or 07960 743650

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