Clifford Chance raises maximum NQ lawyer pay by £1,000 as it overhauls system

Clifford Chance (CC) has increased its maximum pay for newly qualified (NQ) associates by £1,000, as it overhauls its salary system.

The most junior associates at CC are now set to receive £85,000 a year in base pay plus a fixed bonus as long as they meet their development goals, up from a maximum of £84,000 last year if they received their full discretionary bonus. According to the firm, the change means the vast majority of NQs will now take home £85,000.

Under the revised pay system, those with one year’s post-qualification experience (PQE) will now receive up to £95,000 – up from £90,600 in 2015-16 – as long as they meet their development targets.

London managing partner David Bickerton said if the lawyers are developing the “skills and good habits of an exceptional lawyer”, they will receive the bonus.

The firm has overhauled its pay structure for those with two and three years’ PQE, who will now be paid a base salary and a variable bonus depending on performance.

It has published two average pay rates for these lawyers, encompassing both base salary and a bonus, one for those making a “good contribution” and another for those making an “excellent contribution”, distinctions similar to those introduced for senior associates at Slaughter and May several years ago.

Associates with two and three years’ PQE in the “good contribution” bracket will receive an average of £100,000 and £111,000 a year, respectively.

Meanwhile, those in the “excellent contribution” bracket with two years’ PQE will receive £119,000 per annum, while three years’ PQE lawyers in the same bracket will receive pay of around £130,000 a year.

Due to the changes in the compensation system, year-on-year comparisons are difficult but the average “excellent” lawyer three-year PQE level of £130,000 is slightly up on the maximum salary and bonus of £128,050 in 2015-16.

The changes mean CC’s pay and bonus for NQ lawyers now matches Freshfields’ base salary for NQs and is more than the average pay and bonus for NQ lawyers at Linklaters.

First- and second-year trainee salaries have increased by 4% to £43,500 and £49,000.

The new salaries came into force on 1 May.

CC is the fourth magic circle firm to unveil its associate salaries this year. Out of the five, Freshfields remains the firm with the highest base salary for NQ lawyers at £85,000-£97,000 – a hike of 26%. However, this year it scrapped bonuses for NQ and one-year PQE lawyers, while those in the next band up can receive a bonus of up to 20% of their salary.

Linklaters boosted NQ pay by 18% to £81,000 but high-performing NQs can expect to get £91,000 on average. Linklaters’ rates include basic salary combined with median bonus. The firm declined to give a basic salary or bonus figures but said there had been “additional investment in salaries”.

Meanwhile, Slaughter and May posted a more modest increase in salary this year, with NQs receiving a pay rise of 2% to £71,500.