UK 4 years’ PQE & 5 years’ PQE SALARIES OUTPERFORM MORE SENIOR IN-HOUSE SALARIES
In the UK, 4 years’ PQE and 5 years’ PQE salary bands have increased most since 2004 while 9 years’ PQE and 10 years’ PQE salaries have fallen furthest - Russian lawyers see greatest increases in salaries over last 6 years - Salaries fall most in Spain & Belgium – but Poland still has worst pay in EU
Over the last six years, 4 years’ PQE and 5 years’ PQE salary bands in the UK have increased more than others, according to international legal recruiter Laurence Simons. Salaries of 5 years’ PQE in–house lawyers have risen 7% over the last six years while those of 4 years’ PQE lawyers have risen 14%. In 2004, a 4 years’ PQE salary was worth £57,000. That has now risen to £65,000. 5 years’ PQE salaries have risen from £65,750 in 2004 to £70,500 today.
The research shows the big losers of the downturn have been the 10 years’ PQE and 9 years’ PQE salary bands. In 2004, the average 9 years’ PQE salary was worth £89,000. But by 2010, average salaries at that level had fallen to £84,750 – down 5%. Average salaries at the 10 years’ PQE level have been hit even harder. They fell from £95,500 in 2004 to £89,000 (down 7%) in 2010.
Naveen Tuli, managing director of Laurence Simons said, “Many people assume senior lawyers suffered the least during the downturn but as far as in–house roles go, that’s wrong. Our research shows that 4 years’ PQE and 5 years’ PQE salary bands performed proportionately much better than 9 years’ PQE and 10 years’ PQE - perhaps reflecting the ‘sweet spot’ at which most legal departments look to hire in lawyers to their teams. Over the last 18 months or so, those companies that have been in the fortunate position to be hiring in-house staff have tended to focus on those with slightly less experience as such 4 years’ PQE and 5 year’s PQE lawyers have been in demand and that has driven up salaries.”
Rachael North, director of Laurence Simons adds, â€œThis has been particularly noticeable in the technology and telecoms sectors. The increasingly rapid pace of digitization and the widespread adoption of mobile broadband have meant the telecoms and technology sectors have ridden out the global downturn relatively well. Although 2009 saw some salary freezes and non payment of bonuses, in 2010 the market has shown slow, but steady signs of improvement.â€?
INTERNATIONAL WINNERS & LOSERS The research, which was gathered over the course of six years and collated data from over 14,000 in–house lawyers throughout the world, also showed salaries in Russia had performed better than any other country in the world. Pay at the 2 years’ PQE level has increased 81% from 2004, up from €25,000 to €45,250 in 2010 (UK: +15%).
Meeta Dutt, manager for Russia, Central & Eastern Europe at Laurence Simons said, “By 2004, the concept of an internationally staffed in–house legal department had become accepted by local Russian companies keen to float on international stock exchanges. The result of that, alongside the boom in the energy, metals, consumer, and technology sectors, was intense competition both for the best local lawyers and those trained in the UK or US, who could demonstrate good cross–border corporate finance and M&A transactional experience. In the last five years business focused lawyers with generalist commercial skills in both multinational and domestic companies have become increasingly more sought–after.”
GLOBAL SALARY DECREASES – SPAIN & BELGIUM The story was very different in Belgium and Spain. In Belgium, 2 years’ PQE salaries have fallen 29% over the same period while salaries in the 4 years’ PQE band have fallen 26% (UK: +14%). Tanja Albers, european in-house manager at Laurence Simons said, “The Spanish in–house market remains something of a ‘closed shop’ with few if any organisations recruiting outside the country. Salaries have been hit by this and the substantial damage done to the Spanish economy by the recession. There’s little sign of early recovery there.”
POST BOOM RECOVERY Although the downturn didn’t hit Russia particularly hard – with the worst affected salary band (10 years’ PQE) still rising 5% from 2008 (€89,750) to 2010
(€94,250) – the real winner post the 2008
watershed has been the Middle East. The largest increases across salary bands from 5 years’ PQE to 10 years’ PQE have all been recorded in the Middle East, with the 5 years’ PQE band rising 41% from €123,000 to €173,000. Since the boom, the worst cuts at a more junior level have occurred in Spain. More senior salary bands, have been hit hardest in Germany. The average 10 years’ PQE salary in Germany has fallen 31% – from €135,000 in 2008 to €93,750 in 2010.
Tanja Albers said: “We do not expect to see much improvement in senior pay levels in Germany until well into the second half of the year.” Mark Anderson, Middle East manager at Laurence Simons added, “The situation is better in the Middle East. Despite Dubai’s well–documented economic woes, the Gulf region as a whole has held up relatively well through the downturn. But even here, the boom time for lawyers is most definitely over. Over the last twelve months, pay levels have remained flat with little sign of any early rise.” Meeta Dutt adds, “Russia’s going through something similar, too. Candidates with good international experience are still demanding high salaries. But looking to the future, the expectations of huge pay increases so common in the boom years have been consigned to history.”
EUROZONE SALARIES – A SNAPSHOT COMPARISON Within the Eurozone, at all levels, the highest salaries are to be found in Ireland. The worst paid in–house lawyers with less than 3 years’ experience are to be found in Spain. The worst paid in–house lawyers with more than 3 years’ experience are to be found in Poland. Naveen Tuli said, “The market for in–house lawyers in Poland is a relatively new one but is being fuelled by a growing desire to keep the cost of legal services down to an acceptable level. Despite the increasing number of in–house lawyers in the country basic pay still tends to be lower than that on offer in law firms. The average in–house lawyer with 10 years’ qualified experience can earn €113,000 a year in Ireland but only €63,750 in Poland.”
GLOBAL FORECASTS – HEADCOUNT, THE ECONOMY, & BRAZIL 82% of lawyers interviewed said they thought headcounts at their current employer would either increase or remain static over the course of the next 12 months. While 56% expect them to remain unchanged, 26% of in–house lawyers predict their office numbers are going to rise over the course of the next year. And when asked about the future of the global economy over the next twelve months, 66% of respondents described themselves as “optimistic” or “extremely optimistic”. Only 24% said they were either “pessimistic” or “extremely pessimistic”.
Laurence Simons said Latin America, and specifically Brazil would drive international growth in in-house legal jobs over the coming year. Pedro Amaral Dinkhuysen, Latin American managing partner at Laurence Simons said, “While the boom times are over for the Middle East, certainly for the short term, the market in Brazil – where we are seeing a huge influx of law firms into Sao Paulo and Rio – is very strong. This has caused a noticeable upward pressure on pay – in some cases by as much as 20% for in–house lawyers and 30% for law firm practitioners. Lawyers with solid experience in corporate, banking, compliance and tax are most in demand and able to command a premium to move in the current climate.”
Company Name â€“ Laurence Simons Website - http://www.laurencesimons.com/ Address - 322 High Holborn, London, WC1V 7PB Telephone - +44 (0)20 7645 8500