Freshfields hikes newly qualified lawyer pay by 26% alongside flexible working measures

Freshfields Bruckhaus Deringer has hiked pay for its newly qualified lawyers by 26% as it also introduces flexible working for fee earners.

The firm has raised salaries for newly qualified (NQ) lawyers to between £85,000 and £97,500. The rise in NQ salaries makes it the magic circle firm with the highest base salary for NQ lawyers of the three that have so far announced their salaries for 2016-17.

Freshfields operates a career milestone model as opposed to a traditional associate lockstep system, which allows greater flexibility for lawyers to have their pay increased based on merit.

Lawyers with roughly one, two and three years’ post-qualification experience (PQE) have also seen their salaries rise substantially.

Those with one year PQE will be paid in the same band as NQs.

Those with two and three years PQE have seen their salaries rise to between £105,000 and £115,000, up from between £87,500 to £100,000.

However, those in the NQ and one year PQE band are not eligible for a bonus, which they were eligible for last year, while those in the next band up can receive a bonus of up to 20% of their salary.

Freshfields has also boosted pay for its trainees to £43,000 in their first year, up from £41,000, and £48,000 in their second year, up from £46,000.

All the revised salaries were effective from 1 May.

Alongside the jump in salaries the firm has also introduced agile working for all its fee earners. Lawyers will now be able to work from home for up to 20% of the time.

Julian Long, Freshfields London managing partner, said the firm’s ability to “attract and retain the most talented individuals” was “critical” to its success.

He added: “Obviously we should not underestimate the need to be competitive with regards to pay in our market; we believe that making changes across the board for our trainees and associates maintains our strong position as one of the most attractive firms in the market.”

The rise follows the salary bands being frozen last year.

Freshfields is the third magic circle firm to announce 2016-17 salaries.

Earlier this week Slaughter & May announced it has increased its associate pay scale by up to 4.6%.

The rises, which took effect from 1 May, will see all of the firm’s lawyers move up through the bands, with the rate for each band also increasing.

Newly qualified lawyers (NQs) will see pay rise by 2% to £71,500, while lawyers with one year’s post-qualification experience (PQE) will see the biggest rise, with a 4.6% hike to £79,000.

Lawyers with two years’ PQE will see their pay increase by 3.7% to £90,250.

Those with three years’ PQE will see their salaries rise by 3.3% from £96,500 to £99,750.

Meanwhile, salaries for first-year trainees are increasing by 3.7% to £42,500 and for second-year trainees they will increase by 3.3% to £47,500.

Linklaters announced its associate pay in March, with increases of between 12% and 21%. However, Linklaters’ rates included basic salary combined with median bonus, making them impossible to compare with the basic salary quoted by Slaughters.

NQs saw an 18% pay rise to £81,000, with top-performing lawyers able to receive up to £91,000, while lawyers with one year’s PQE received the highest increase of 21%, to £90,000.

Clifford Chance and Allen & Overy are yet to announce their salaries for the current financial year.

Last year Allen & Overy hiked pay for NQs to £78,500 a year, up from £66,500.