New qualifiers must wait two months for salary hike

One of the biggest legal employers in Yorkshire will keep its newly-qualified (NQ) solicitors on trainee pay until November.

Walker Morris — which hires 15 trainees annually — has delayed its NQ pay rise for a period of two months, meaning second year trainees will continue on £29,000 upon qualification in September.

Walker Morris confirmed to Legal Cheek that it has retained 16 of its 18 autumn qualifying trainees. But the firm added that they’ll have to wait until November to earn an expected £44,000, as per our Firms Most List.

The firm says the NQ pay delay is consistent with its deferral of all pay reviews — for partners, who have also agreed to defer profit distributions (Walker Morris partners earn around £400,000 per year), and staff — until November.

In a statement the firm said:

“We have seen businesses and law firms across the country face difficulties as a result of the COVID-19 pandemic. However, we have retained 16 NQ positions available to our 18 qualifying trainees — one of our largest cohorts ever — which reaffirms our position as one of the largest legal graduate recruiters in the city. Whilst we continue to invest in our trainees and newly qualified solicitors, we have delayed our NQ pay rise for two months.”

It continued:

“We are probably better placed than most firms to see this out, but even the strongest firms are facing significant challenges if this continues. We believe the steps we have taken are an appropriate and proportionate response to an extraordinary situation. Actions have been taken to conserve cash to give us the best opportunity to come through in the best shape for the benefit of all of us, partners, staff and clients alike.”

Other firms have taken steps to curb the financial fallout brought on by the coronavirus.

Travers Smith has deferred all salary reviews and reduced its annual firm-wide bonuses.

A Travers Smith spokesperson said: “Given the current uncertain conditions, we have deferred all salary reviews until later in the year and have awarded firm-wide bonuses albeit at a reduced rate.”

They added:

“The last few months have seen trading conditions unlike any we have seen previously; however, the firm continues to perform well and the measures we have put in place help us ensure prudent cash management during this period.”

Back in April, the firm deferred partner profit distributions and reduced monthly drawings. It furloughed a small number of staff, “principally those performing front of house, post room and hospitality roles”, but confirmed today that it has not made use of the government’s Job Retention Scheme and that “everyone has been kept on full pay throughout”.

Meanwhile, Bryan Cave Leighton Paisner (BCLP) announced this week that it will axe 19 fee-earners and 26 business services staff in its London office. BCLP also shuttered in Beijing.

The firm is also reducing pay cuts for employees and lawyers earning more than $40,000 (£32,000) to 7.5%. BCLP previously imposed a 15% cut across its offices in May for an initial 13-week period. The new pay cut will apply from August until the end of the year.

In a joint statement BCLP co-chairs Lisa Mayhew and Steve Baumer said:

“After exceeding performance expectations during the first half of this extraordinary year, we’re pleased to begin rolling back salary reductions necessitated during the worst of the pandemic conditions.

“Looking ahead, we plan to continue taking proactive steps to provide as much clarity as we can to all our colleagues and to ensure our firm is best positioned moving forward. While a difficult decision to make, we believe the limited adjustments to our workforce are in the best interest of our clients, our business, and our people for the long-term.”

BCLP previously reduced NQ wedge by 2.5% to £78,000.

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Applies to lawyers and staff across firm’s global offices

Ropes & Gray has banned the use of TikTok on devices which receive work emails following privacy concerns raised by clients.

The firm-wide measure follows media reports that the popular short-video social media app, owned by Chinese tech company ByteDance, is able to access sensitive personal data stored on a device. Last month, TikTok was reportedly caught accessing users’ cut-and-paste data stored on their clipboard on Apple devices.

The blanket ban designed to better protect client confidentiality will apply to lawyers and staff across its global network, including its London office.

Ropes’ reaction comes as TikTok, which has been downloaded more than two billion times globally, faces growing scrutiny after the Trump administration announced that it was considering banning the app across the US.

US bank Wells Fargo reportedly banned TikTok from all company devices last week, while Amazon recently backtracked on their demand for workers to delete the app over security concerns.

Cyber-security has become an immediate challenge for law firms as employees continue to work from home in the wake of COVID-19. As reported by Legal Cheek, research has shown that almost two thirds (63%) of home-working legal staff are storing files on their own devices, raising concerns about data security. Three percent even admitted that the computer they used for remote-work is not password protected.

You can still find Legal Cheek on TikTok, at @legalcheek. Watch our latest clips and don’t forget to give us a cheeky follow.

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Also breached accountancy rules

A partner at a national law firm has been fined £4,000 for asking if it was acceptable to refer to a gay trainee solicitor as a ‘poofter’, before repeating the offensive remark in front of the rookie.

Charles Jerome Darby, a commercial partner at Freeths’ office in Leicester, is said to have made the derogatory comment in July 2019 during an informal gathering of staff at the end of the day.

A regulatory settlement agreement published by the Solicitors Regulation Authority (SRA) states that “Mr Darby in the context of a comment by a colleague, that it was acceptable now in certain circumstances to refer to travellers as gypsies, asked whether it was acceptable to refer to a homosexual trainee solicitor as a ‘poofter’.”

The experienced solicitor then repeated the question after the unnamed rookie, who was in earshot at the time, asked him what he had said.

Freeths conducted an investigation into the incident after the trainee complained about Darby’s behaviour. He received a reprimand and a warning as to his conduct over the next 24 months, according to the agreement.

Darby, who was admitted to the roll in 1986, offered to apologise to the colleague for his comments, which was noted by the firm when making its decision.

Separately, the partner was also sanctioned for breaching SRA accountancy rules after being asked by a client to have a debt paid into the firm’s client account, rather than direct to the client.

The agreement states that Darby “informed the client that the firm could only accept the money if it had been instructed in relation to the underlying transaction from which the debt arose. Mr Darby proceeded to obtain details of that transaction from the client”.

It continues: “On 1 August 2019, the debtor’s solicitor paid £123,558 into the firm’s client account. Mr Darby then arranged for the money to be forwarded to the client, even though the firm had not been instructed in relation to any underlying transaction.”

On 11 September 2019 Mr Darby reported both matters to the SRA.

In mitigation, Darby said he had co-operated with both the firm’s and the regulator’s investigations, had offered to apologised to the colleague, and had undertaken training on the accountancy rules.

The SRA said a fine of £4,000 was an appropriate outcome because it “will deter Mr Darby and others in the wider profession from similar behaviour in the future”.

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‘I struggle to see how this could truly be replicated virtually’

A future City trainee solicitor is “alarmed” that some people would prefer never to go back to the office now that lockdown restrictions have eased.

In a letter to The Telegraph published over the weekend, the future trainee, who is due to commence her training contract with a leading global law firm, writes:

“I believe a fundamental part of my training contract will be spent observing, listening and learning from senior lawyers in-person through my working day. I struggle to see how this could truly be replicated virtually.”

The future rookie’s concerns come amid continued coronavirus disruption. In March, lawyers, like with the rest of the nation, moved to more agile ways of working as the nation plunged into lockdown.

Prime Minister Boris Johnson has since urged the country to “go back to work if they can” but it seems law firms are likely to continue to let their lawyers, and their trainees, work from home even after the pandemic has passed. Some have even decided to ditch the office altogether.

Last week, for example, the largest law firm in the world announced that it was shuttering two of its UK regional offices, with all of its staff, including five trainees, set to work from home permanently. This follows research published in May citing 61% of all legal workers wanting to continue with remote-work once lockdown restrictions are lifted.

The Cambridge grad, who has this year completed the Legal Practice Course, goes on to write that working from home indefinitely and never returning to the office may suit some people who have been in their job for years and are confident in what to do, but, she adds, “where does that leave anyone who is just starting out?”

Indeed, it can be a daunting prospect for incoming trainees: most law firms encourage ‘facetime’ among their junior ranks since they’re learning the ropes, after all. They might face a longer lead time from September given that they’re adjusting to a new firm under new conditions and will have to get to grips with new systems that they would normally pick up in-person during the induction.

But this hasn’t fazed some of our readers who, admittedly, are further along their TCs.

Earlier this year, one first-year City trainee told us that they were adapting well to remote-working. They described senior members as “supportive” and said they were engaged with “lots of daily calls/video conferencing with our departments to keep everyone connected”.

By contrast, one magic circle trainee revealed that juniors were taking the brunt of heavy workloads with little to no support from seniors or development teams making it difficult for them to maintain a healthy work/life balance.

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Revenues up too despite pandemic

Clifford Chance has become the third magic circle player to post its 2020 financial results, revealing modest uplifts to both revenue and profit per equity partner (PEP).

The Canary Wharf-based giant boosted PEP by 5% to £1.69 million and increased revenue by 6% to £1.8 billion, according to its financial results for the year ending 30 April 2020. Profits sit at £666 million, again a 5% increase year on year.

Today’s results mark the strongest on record for the firm “despite the last quarter of the year being marked by the impact of the spread of the coronavirus across the globe”.

Similar to its magic circle rivals, CC revealed back in April that it had taken a number of steps to mitigate the financial impact of the COVID-19 outbreak, including deferring partner distributions and freezing salary reviews.

“In 2015 we put our vision to be the global law firm of choice at the core of all we do,” commented Matthew Layton, Clifford Chance’s global managing partner. “Since then, we have made excellent progress against our goals by taking a long-term view and making strategic investments in our business while remaining agile and adaptable.”

Layton added:

“I am very pleased that, over the five year period of our strategy, we have seen strong profitable growth across all our regions.”

The newly released financials follow the publication of Allen & Overy (A&O) and Linklaters‘ results last week. A&O saw PEP shrink by 1.7% to £1.63 million but revenue grow by 4% to £1.69 billion. Meanwhile, Links’ revenue increased slightly (0.7%) to £1.64 billion and PEP dropped by 5.1% to a still very impressive £1.61 million.

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Silver circle firm’s PEP is down 7% and NQ pay frozen as it confronts the pandemic

Ashurst has released its latest set of financial results, with partners continuing to earn in excess of £900,000 in spite of the economic uncertainty caused by the coronavirus pandemic and NQs still on £84,000.

According to figures for the year ending 30 April 2020, average profit per equity partner (PEP) at the silver circle firm fell by 7% to £903,000. The drop contrasts with the whopping PEP boost of 31% enjoyed by partners this time last year, who saw their earnings swell from £743,000 to £972,000.

The fresh financials reveal the firm’s revenue has also slightly increased by 0.5% to £644 million.

“FY20 was a year of consolidation,” commented Paul Jenkins, Ashurst’s global managing partner. “Our aim in FY20 was to sustain and build on the strong 14% revenue growth we saw in the previous financial year and it was pleasing to see that growth continue.”

He continued:

“We were on target to achieve a higher level of growth until late January when markets in Asia Pacific, in which we now generate almost 50% of our revenue, were the first to be disrupted by the pandemic. Our other markets were impacted towards the end of the financial year. We have delivered a robust performance despite these challenging market conditions.”

The fresh results come after Ashurst took steps earlier this spring to mitigate the financial impact of COVID-19. Like many outfits across the City, the firm asked some staff to work fewer hours for less pay and reduced partners’ monthly drawing by 20%.

Meanwhile, Ashurst confirmed the pay packets of its newly qualified (NQ) lawyers will remain unchanged this summer. Legal Cheek‘s Firms Most List shows NQs receive a salary of £84,000, though earnings can swell to as much as £105,000 with bonus applied.

A spokesperson for the firm said: “We always aim to attract and retain the best diverse talent. Our NQ lawyers can receive up to £105k in remuneration. We believe that this is a competitive package and we continue to monitor and review to ensure that this remains the case.”

Retuning to the world of law firm financials, magic circle duo Linklaters and Allen & Overy posted PEP figures last week of £1.61 million (down 0.7%) and £1.63 million (down 1.7%) respectively. Meanwhile, Clifford Chance confirmed yesterday that PEP was up 5% to £1.69 million.

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38 out of 41 trainees stay on

Allen & Overy (A&O) has today announced an autumn retention score of 93%.

Of the 41 final-seat trainees due to qualify in September, 38 applied for newly-qualified (NQ) positions at the firm. All 38 trainees were offered and accepted NQ roles. A spokesperson confirmed that none of the new associates will be on fixed-term contracts.

James Partridge, graduate recruitment partner at A&O, said:

“These are very positive numbers and I’d like to congratulate all of our September qualifiers.”

He added: “To be able to put forward a 100% offer rate in such an uncertain market is testament to the quality of our upcoming lawyers and demonstrates our commitment to continuing to invest in the future of legal excellence at A&O.”

A&O, which offers about 90 training contracts each year, did not disclose the departments or offices its new recruits will qualify into.

NQs can expect to earn £90,000, comprised of salary and sign-on bonus, after the magic circle firm opted to cut pay by 10% from a minimum of £100,000 last month due to the coronavirus pandemic.

Earlier this year, A&O posted a spring score of 81%, retaining 30 out of 37 trainees. It kept 39 out of 44, or 89%, trainees in the last autumn round.

A number of law firms have announced their autumn 2020 trainee retention results in the past month. Clifford Chance (CC) is so far the only other magic circler to reveal its score. CC will retain 36 out of 46, or 78%, of qualifying trainees.

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Magic circle player cites ‘challenging economic climate’

Freshfields has gone public with its latest set of financial results, with equity partner earnings dipping slightly to £1.82 million.

The Anglo-German giant posted a 3% uptick in revenue to £1.52 billion for the financial year ending 30 April 2020, with profit per equity partner (PEP) down 1% from £1.84 million to £1.82 million.

Freshfields said net profit remains “stable” at £685 million, down from a previous figure of £688 million, “despite investing significantly in the future of the firm”.

Stephan Eilers, managing partner at Freshfields, said: “This is a strong set of results, driven by a long-term strategy that has seen us progress despite the challenging economic climate. We have made some significant investments this year that give us an even stronger platform for the future, and I’m excited about what we can achieve.”

He added:

“We continue to advise on the most dynamic mandates in the market and are forging ahead with our US expansion plans. I would like to thank our people for their outstanding efforts and above all our clients for trusting us with their business-critical matters right around the world.”

The results come after Clifford Chance announced yesterday a 5% increase in PEP to £1.69 million and a 6% uplift in revenue to £1.8 billion. Elsewhere, Allen & Overy and Linklaters saw their partner profits shrink slightly to £1.63 million and £1.61 million respectively. The remaining magic circle firm, Slaughter and May, does not disclose its results.

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Akin Gump, Vinson & Elkins, Sidley and Debevoise have ‘no plans’ to reduce London trainee or NQ pay

The London offices of four US law firms have kept their newly-qualified (NQ) and trainee solicitor salaries at their current rates in spite of the economic headwinds brought on by the coronavirus, telling Legal Cheek that they have “no plans” to reduce them.

As other City firms continue to chip away at the pay packets of their junior ranks, autumn recruits at Akin Gump, Vinson & Elkins, Sidley Austin and Debevoise & Plimpton, will see no cuts to pay.

Our Firms Most List shows that first year trainees at all four firms start on a salary of £50,000, rising to £55,000 in their second year. This will continue to be the case from September.

The firms award their NQs varying amounts.

Akin Gump pays its new associates a market-topping £150,000 ($190,000) upon qualification. A spokesperson for the firm told us that it has “no plans” to make changes to its UK salary scale. Akin Gump bumped NQ pay to this level back in 2018.

NQs at Vinson & Elkins will continue on a dollar-tied salary of £147,500, while their counterparts at Sidley Austin and Debevoise & Plimpton will remain on £135,500 and £134,800, respectively.

The quartet are not alone in holding the MoneyLaw line.

Ropes & Gray announced last week that it will stick with its £130,000 NQ pay package.

Earlier this month, we reported that Cleary Gottlieb and White & Case will continue to pay their new qualifiers £133,000 and £105,000, respectively.

However, Jones Day, like with some other City law firms, has cut NQ pay. Solicitors qualifying in the US firm’s London office will still receive a six-figure-sum albeit one that’s down £5,000 from £105,000.

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Is this a new social media trend?

Now there’s a ‘Kirkland & End It’ Instagram account poking fun at the legal profession.

The meme page, which is in no way associated with Kirkland & Ellis, has 1,214 followers at the time of writing, and uses an adapted version of the US firm’s logo.

“Our memeable time is £500 per hour + VAT + disbursements,” the anonymous user quips.

The account launched in March and has since shared 38 memes poking fun at trainee life, billing targets and moneylaw salaries, among other things. Here are Legal Cheek‘s faves:

“I want to become a lawyer to help people”

View this post on Instagram

“I want to become a lawyer to help people”

A post shared by Kirkland & End It (@kirkland_and_endit) on Mar 14, 2020 at 4:52pm PDT

Law students, a 2.1 in tort does not mean you are a lawyer

View this post on Instagram

Sorry Alex but I’m pretty sure you’ve just got a 2:1 in Tort law. It doesn’t mean you’re a lawyer.

A post shared by Kirkland & End It (@kirkland_and_endit) on Mar 20, 2020 at 7:13am PDT

The paralegal-trainee divide

View this post on Instagram

You mean you don’t have a training contract?

A post shared by Kirkland & End It (@kirkland_and_endit) on Mar 14, 2020 at 2:23pm PDT

A swipe at non-Russell Group uni students securing TCs

View this post on Instagram

A post shared by Kirkland & End It (@kirkland_and_endit) on Mar 14, 2020 at 2:17pm PDT

The circle of law life

View this post on Instagram

The circle of life

A post shared by Kirkland & End It (@kirkland_and_endit) on May 22, 2020 at 2:42am PDT

Keep calm and keep billing

View this post on Instagram

20 hours of billables a day keeps the doctor away

A post shared by Kirkland & End It (@kirkland_and_endit) on Mar 16, 2020 at 4:27pm PDT

*Visible confusion*

View this post on Instagram

“You mean to tell me Arthur, Chris, Tess and Vicky are all doing fuck all at home binge watching Netflix shows and getting the same pay as me whilst I continue to bill 60 hours per week?” .. “Yes, they have been furloughed and are supporting the firm in their own way through this UNPRECEDENTED crisis”- associate/hr

A post shared by Kirkland & End It (@kirkland_and_endit) on Apr 22, 2020 at 6:40am PDT

Gotcha!

View this post on Instagram

If you don’t get it then learn to play chess – management.

A post shared by Kirkland & End It (@kirkland_and_endit) on Jun 19, 2020 at 6:22am PDT

Launching law meme accounts on Instagram has become somewhat of a trend in recent months. Earlier this year we saw ‘Allen & Over It’ (a play on Allen & Overy) grace the pages of Legal Cheek.

‘Slaughtered and Dismayed’ (a play on Slaughter and May) was brought to our attention last October. The page mocks life in City law through the medium of memes, and has since gathered a 12k-strong following.

Neither ‘Allen & Over It’ nor ‘Slaughtered and Dismayed’ are affiliated with the magic circle duo.

Last month, we brought you ‘Magic Circle Confessions’, an Instagram account that allows City lawyers to anonymously submit their “juicy secrets”.

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Strong 90% score follows firm’s decision to delay start dates of future trainees

Irwin Mitchell has posted a solid autumn 2020 trainee retention score of 90%.

Of the 52 final-seat trainees due to qualify next month, 47 have opted to stay on as newly-qualified (NQ) associates. None are on fixed-term contracts.

The national giant — which takes on around 50 trainees each year — confirmed that 24 NQs will qualify into its personal injury court of protection and public law teams, 16 join the business legal services division, and a further seven start lawyer life in private wealth.

Marissa Sanders, head of early careers at Irwin Mitchell, said:

“We’re really pleased to be able to retain 90% of our trainees during what is clearly a strange time for all businesses. The calibre of our trainees the training and support they receive is excellent and we look forward to them working with them.”

Sanders added: “With many of our partners having started their careers with us as trainees, we wish our latest NQ solicitors similar success in the years to come.”

Legal Cheek‘s Firm’s Most List shows IM’s new recruits in London start on a salary of £50,000, while rookies in the regions will receive between £36,500 and £41,500.

The strong retention round comes after Legal Cheek revealed in April that the firm had postponed the start dates of its future trainees in response to the pandemic.

Trainees due to commence their TCs with the firm in September will now join in February 2021, six months later than originally planned. A number of firms have since taken similar steps, including HFW, DWF, Womble Bond Dickinson and DLA Piper.

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A&O funds lawyer Paul Sampson says he can now have dinner with his wife and read his kids a bedtime story

A magic circle partner has revealed some of the things he “rarely or never did” prior to the coronavirus lockdown, and how his life has changed for the better because of it.

In a refreshingly honest post (below) shared on his LinkedIn last Friday, Paul Sampson, a funds lawyer at the London office of Allen & Overy, lists nine activities he could barely get around to doing during the working week, and we presume, can now do so since working from home.

Between Monday to Friday, he would be hard-pressed to help with all the errands and chores around the house, as per his post.

A&O’s average leave the office time is 8:43pm, according to our annual survey, which is also roughly in line with its magic circle rivals. So it’s understandable that Sampson would also struggle to find the time to eat dinner with his wife, or bathe his kids and read them a bedtime story.

Sampson continues in the post, which has received 1,528 reactions at the time of writing, that he’s able to go for walks in the fresh air, watch mindless tele “just for the sake of it” and even wear the same pair of trackies each day.

“The list goes on,” says Sampson, who is an A&O-lifer, having spent more than a decade with the firm. “Some of these things are difficult/embarrassing to admit to,” he continues, adding: “Looking back, all of them were my doing; behaviours repeated day-after-day without really stopping to think how I might do things better.”

He goes on to reflect on another lesson he has learnt from the coronavirus pandemic:

“We are living through one of the most important social experiments there has ever been. This has been enforced upon us and we miss many of the things we previously took for granted. What we’ve gained though is the opportunity to re-evaluate what we were doing before and make some positive changes for the future.”

A&O might’ve only just partially reopened its City HQ but one LinkedIn user was keen to know which of his list Sampson wouldn’t be prepared to give up. In response, Sampson quipped: “That’s a really tough question but if I had to choose, I think it would be the tracksuit bottoms .”

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Exclusive: Watson Farley & Williams to review process and will resume once able to run assessment centres effectively

Watson Farley & Williams (WFW) has paused recruitment for direct training contract applicants as it announced a 94% autumn retention result.

In an email update sent to TC applicants on Friday and seen by this website, WFW announced that it has paused recruitment for non-vacation scheme applicants for training contracts pending a review of its processes in light of current restrictions impacting the London office and its ability to run assessment centres effectively.

Prospective 2022 TC candidates will be updated later in the year, a spokesperson from the firm confirmed.

They added that recruitment via vacation schemes, from which it recruits the majority of its trainees, was completed earlier this year and prior to the lockdown meaning it was able to proceed with running the schemes virtually. The firm offers three vacation schemes of two-week periods in the spring and summer each year.

This comes as the firm announced a solid autumn 2020 retention score of 94%.

WFW will keep 17 out of 18 of its final-seat trainees upon qualification in September, all of whom are on permanent contracts.

Our Firms Most List shows newly-qualified (NQ) associates at WFW can expect to earn £73,700 — an uplift of 60% on year two pay.

Six NQs will join the City firm’s assets and structured finance team; two are corporate-bound; while debt capital markets; dispute resolution; employment; projects and real estate will gain one rookie each. The final four NQs will join the firm’s overseas offices in Athens, Bangkok, Hanoi and Singapore.

In the last autumn round the shipping specialist retained 71% of its qualifying trainees.

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Aria Grace Law looks to ‘spread the wealth’

A corporate law firm has pledged to donate all of its profits to charity each year in an effort to “spread wealth with clients, lawyers and society”.

Aria Grace Law, a law firm which has 30 lawyers all of whom are partners, will give at least £150,000 to charitable causes if it reaches its financial targets this year.

According to Aria Grace Law founder Lindsay Healy, giving back is “integral” to the firm’s ethos. He said:

“Our model, when you boil it right down, is to spread wealth, with clients, lawyers and society as one ecosystem. We want to get away from the typical law firm triangle where the people at the top make the money and the people at the bottom do the work”

He continued: “We believe there is a better way, and through working together and sharing more, we are creating more. I am not surprised to find that plenty of top-quality lawyers agree, particularly at a time where businesses need to prove their principles with deeds rather than words.”

The firm’s lawyers previously kept 85% of their fees and the remaining sum after overheads, was redistributed back to them — leaving less than 5% for charity.

Under the new model, lawyers will retain 90% of their fees and all profits generated will go to charitable causes including Great Ormond Street Hospital from this month onwards. The firm aims to reach a turnover of at least £2 million in its current financial year. “Everyone wins: clients and lawyers, and because of our model, society and the next generations,” said Healy, a former solicitor at Norton Rose Fulbright.

Aria Grace’s commitment is in stark contrast to the profit per equity partner (PEP) model, whereby a firm will distribute its profits amongst its equity partners.

The Aria Grace’s announcement comes as the UK’s top law firms publish their 2019-20 financial results.

Last week, magic circle firm Freshfields reported a 1% dip in PEP to £1.82 million, while Clifford Chance confirmed PEP was up 5% to £1.69 million each. This came after the publication of magic circle duo Allen & Overy (A&O) and Linklaters‘ results earlier this month — with A&O seeing a 1.7% decrease in PEP to £1.63 million each, while Links confirming a 5.1% PEP drop to a still whopping £1.61 million each.

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Inaugural rookie will complete ‘non-rotational’ TC

US law firm Crowell & Moring is to take on its first trainee solicitor in London.

The Washington-headquartered firm confirmed it will recruit one rookie to start in January 2021, with plans to hire more in the future as part of a wider strategy to strengthen its presence in the City.

Crowell first revealed its City TC ambitions early last year, however details regarding the number of trainees the firm hoped to take on, and what they could expect in the way of remuneration, remained unknown until now.

The successful candidate will undertake a ‘non-rotational’ training contract similar to that on offer at fellow US player Jones Day. Instead of spending a set amount of time in a specific department (more commonly known as the ‘seat system’), Crowell’s rookie will be exposed to a broad range of specialisms including arbitration, corporate, finance and international trade, through a more flexible approach.

“Starting a solicitor training programme is another exciting step on our journey toward building the London office,” Robert Weekes, London managing partner told Legal Cheek. “It has always been part of our strategic plans and we have now reached the right point in our development to bring this to life.”

The UK trainee will start on a salary of £45,000, the same five-figure sum on offer at the likes of Freshfields, Dechert and Herbert Smith Freehills, according to our Firms Most List. Newly-qualified (NQ) solicitor pay will sit at £84,000.

Weekes continued: “The new initiative gives us the opportunity to bring on-board new talent and, just as importantly, allows the successful individual to play their part in our plans and ambitions for the future. This is not a one-off opportunity: we see this graduate scheme as playing a key role in growing our team in the years to come.”

The firm says it will now host two webinars next month for potential applicants to learn more about they can expect from the training contract.

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What comes after the pandemic may not be good for MoneyLaw salaries

The first wave of legal outsourcing, which swept the legal profession in the wake of the 2008 financial crisis, seems almost quaint now.

Newly cash-strapped corporate law firms, to which the dream of globalisation remained largely unsullied, resolved to prop up profit per equity partner (PEP) by sending London junior lawyer work to ‘legal process outsourcing’ (LPO) centres overseas. Countries with lower living costs and high levels of fluency in English, such India and the Philippines, became LPO hotspots.

The magic circle jumped on the bandwagon and everyone else followed. We were experiencing a “paradigm shift” which would consign UK-based junior lawyers to extinction and elevate lawyers in these emerging jurisdictions, legal commentators swiftly concluded.

Such were the levels of money flowing into the LPO industry at the time that in 2010 one of these companies paid for me and other journalists to go on a five-star jolly to Noida, the fast-growing New Delhi suburb that had become the heart of much of this action.

On the first day we were brought to the LPO centre apparently used by our host to handle the work of dozens of global law firms. Traffic of a density and variety none of us had previously experienced meant we arrived over an hour late. The tired-looking LPO workers confirmed that what we’d experienced was a daily blight which made commute times unpredictable. A new state of the art metro system set to be introduced at an unspecified date in the future would solve this, our host assured us. The staff — mainly Indian law grads who’d missed out training contracts at local firms and were now working shifts to fit in with UK and US time while looking for other opportunities — shrugged as they weren’t planning to hang around.

This isn’t going to work, me and my travel companions concluded.

Over the next few years we were proved right, as LPO part-faded away and part-morphed into ‘northshoring’ back-office and paralegal work to support hubs in the UK regions. Meanwhile, law firms — whose financial performance recovered but remained muted — found a new saviour in legal tech, which quickly became the next big thing.

Now, though, in the post-Covid world, with law firms once again in search of medicine to boost recession-hit PEP, and legal tech pivoting away from dodgy AI towards law firm Zoom and Teams subscriptions, conditions seem ripe for a legal outsourcing comeback — albeit of a new variety.

Lessons will be learned about timezones and other practicalities. Physical office space will be less important. There is also likely to be an attempt to move up the value chain. Are London-based associates earning hundreds of thousands of pounds a year really better lawyers than their far less generously remunerated counterparts in Leeds, Belfast, Warsaw and Cape Town? If the answer to this question is no, then new societal acceptance of working from home means law firms suddenly have a much larger pool of talent to draw from and a clear path to reducing costs.

In such an environment the law firm pyramid structure would be expected to narrow yet further. Associates on MoneyLaw salaries at elite law firms in the Square Mile would start to look particularly vulnerable.

As I learned in 2010, trends don’t always play out the way people expect. Still, if I was in the shoes of today’s big-earning associates I’d either be making sure I was on the partner track or be giving serious thought to putting my savings towards a hefty deposit on a farmhouse in the Scottish Highlands with an excellent broadband connection.

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Three associates from the London offices of Freshfields, Baker McKenzie and Reed Smith join a ULaw careers expert to share advice

On the panel at this month’s ‘How to become a City lawyer in a post-COVID world’ event were Molly Lewis, associate at Freshfields (and PRIME trustee); Nicolle Odutoye, associate at Reed Smith (and NOTICED board member); Jonathan Tham, associate at Baker McKenzie; and John Watkins, director of employability at The University of Law.

They informed the audience of almost 1,000 prospective City lawyers about the opportunities and challenges ahead as they prepare to enter the post-COVID world of corporate law. They discussed the effect of the coronavirus on managing relationships and conducting business, anticipated hot practice areas of the 2020s, the pre-eminence of traditional law firms, the continued evolution of legal tech; and ways to improve employability and diversity in the workplace.

And we're off #VirtualLegalCheek with @UniversityofLaw @bakermckenzie @primecommitment @NOTICEDiversity @FreshfieldsGrad @reedsmithllp and nearly 1,000 students #StayingSetForSuccess pic.twitter.com/k3wO2fkK6j

— Legal Cheek (@legalcheek) July 16, 2020

The panel were in agreement that the skills required of future lawyers would take on a different emphasis in the post-COVID world. Lewis acknowledged the continued need for students to demonstrate commercial awareness — “having a passion and interest in the commercial world will carry over in any medium” — but said this has to be supplemented with other skills. The panel then set out the skills that they expect to be sought after by legal employers.

Tham referred to tech proficiency and a greater emphasis on skills “that you tend to associate with the younger generation”. The rest of the panel agreed saying that technology will be used to build and maintain relationships with colleagues and clients, citing the increased use of conferencing platforms and apps. Tham added that his firm, for example, hosted a virtual barbeque to maintain relationships with some of its key clients.

Lewis said that the increased use of technology during lockdown had allowed home-working lawyers to “carve out time to have conversations with clients in the time they would have been commuting”, while in view of this, Watkins, an employability expert, encouraged applicants to practice developing relationships and building rapport using virtual platforms.

Further, those with or attempting to secure training contracts were advised to be ready to operate remotely, while webinars are also being used more regularly for the purpose of explaining and educating clients and colleagues alike on processes and procedures such as signing documents electronically.

Comparisons between the 2008 financial and coronavirus crises continue to abound. Although Lewis suggested that we will only be able to observe the true parallels “once the dust settles”, other members of the panel alluded to one similarity being ‘nervousness’. While the public health crisis has, at present, rocked economies worldwide, for Watkins, the message is still the same:

“From a student perspective, it’s about controlling what you can do. Try and prepare yourself to be as ready as you can be. Put yourself in the shoes of the people reading your CVs and show them how you have improved yourself. Don’t be exposed by your Achilles heel.”

And if you are unsuccessful in your application: seek feedback. “The easiest thing is to ignore rejection’, said Odutoye, adding, “follow-up to find out exactly why you haven’t been given an offer and seek to learn from any feedback received.”

When pressed on the practice areas they consider most likely to experience a shift in demand due to the COVID-19 crisis, the overall sense among the panellists was that there will be opportunities as well as challenges in the current circumstances: some sectors, such as healthcare and tech, we were told, are thriving, while Tham suggested that some areas of financing, investment banking and private equity funds remain “lively”.

Where the panellists were split was on whether the dominance of traditional law firms will continue. Lewis agreed with Odutoye that the traditional structure is not going away any time soon, and explained how the most important thing for all law firms is to respond to the needs of clients as a priority. BigLaw operations allow firms to provide legal services across a global network, often assisted by artificial intelligence. Tham also spoke of ‘full-service’ law firms — well-rounded firms that offer advice in a range of practice areas which helps, he said, to diversity their clients and ensure longevity for the business.

On the other hand, Watkins spoke of a changing in “the rules”, arguing that the upcoming generation wants more commitment from their employers to sustainability, as well as to increased diversity and inclusion — providing opportunity for innovative thinking. This was echoed by Tham who agreed that if he was an applicant today, he would be applying to firms that shared his values.

This line of conversation led the panel onto the question of diversity in the workplace. They each shared their views and personal experiences in light of recent events. Lewis reaffirmed PRIME’s commitment to improving access to and diversity “in all its various meanings” within the legal profession. She was raised by a single parent on a council estate in the East Midlands, which she said had driven her to join the PRIME board and had made her passionate about working to improve access to the profession, although she acknowledged that there was still more to be done.

The other panellists reflected on recent discussions that they have had within their firms to promote diversity and inclusion.

Tham has spoken before about drawing strength from his role as a member of the LGBTQ+ community to direct his career towards firms that share his values. He told the audience that Baker McKenzie has a network of diversity and inclusion initiatives, including BakerWellbeing, BakerWomen, BakerAllies, BakerEthnicity and BakerOpportunity, that are well supported across fee-earners and support staff, senior and junior alike. Odutoye recounted her experience as a black lawyer and shared details about the work she undertakes for Reed Smith’s Multicultural Network as its co-chair, and also NOTICED, an inter-law diversity network, in helping to promote racial inclusivity across the legal profession.

Working on your skills to improve employability and adapting to the changing work environment brought on by the coronavirus was, yet again, a key theme at this month’s discussion. But the changes are not only practical: firms are increasingly influenced by the attitudes and ethical standpoints of their potential future employees, demonstrating an interplay in graduate role suitability between employee experience and capabilities, and employer values — which will put pressure on firms to make good on their pledges to sustainable development and diversity, among other things, to attract the best talent.

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Declines to say if any NQs are on fixed-term deals

Freshfields has become the third magic circle firm to reveal its autumn retention score, revealing 32 out of its 38 trainees due to qualify next month are staying put.

The Anglo-German giant confirmed it received 36 applications and made 32 offers. All were accepted, handing the firm a solid result of 84%. Freshies declined to confirm whether any of its new associates are on fixed-term contracts as apposed to permanent deals.

Legal Cheek‘s Firms Most List shows NQs will start on a salary of £100,000 after the firm took the decision in June not to cut pay in response to the uncertain financial climate brought about by the pandemic. Trainees currently earn £45,000 in year one, rising to £51,000 in year two.

Training partner Craig Montgomery said:

“We are thrilled that so many of the newly qualified associates in our September 2020 qualifying intake are staying with the firm. Attracting, retaining and developing the best talent for the long-term remains a key priority for us and we are extremely proud of what these lawyers have achieved so far.”

Last week fellow magic circle player Allen & Overy posted a score of 93% (38 out of 41), while Clifford Chance confirmed earlier this month a result of 78% (36 out of 46). A further two CC rookies accepted six-month deals.

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Do you know your Zoom from your Hangouts?

Older solicitors are more likely to struggle with tech compared with their younger colleagues in the wake of the coronavirus pandemic and moves to more agile ways of working, a survey of small law firms has found.

Sixty-one percent of over 45s experience difficulties adapting to new technology when working from home, compared to 34% of under 45s. This was one of the key findings published today by LexisNexis in its annual Bellwether Report.

The 25-page report, ‘OMG or BAU [business as usual] — COVID-19 and the legal industry’, looks at the sweeping effects the novel virus has had on the legal industry. It is compiled using data from interviews and online surveys completed by over 150 solicitors in small firms and small offices of larger firms across England and Wales.

Law firms were able to move three-quarters (75%) of their staff to effective home-working within a matter of weeks of the lockdown being imposed, the research says, adding that the transition and provision of technology has been “smooth” despite almost a third of respondents claiming not to have a laptop prior to the lockdown.

“Technologies that have been resisted for years have now become a necessity — forcing the adoption of new ways and tools of working,” Chris O’Connor, small law lead at LexisNexis, told Legal Cheek.

Rather promisingly, the report has found that the current public health crisis has brought about a wellbeing change to the legal industry. Twenty-six percent of respondents consider stress and mental wellbeing to be a signifiant problem at work, compared to 90% in 2019. Further, almost half of respondents reported that they have seen a greater focus on their mental health in the wake of COVID-19 home-working.

The research looked at the main concerns affecting the opposing generations. For the older generation (who tend to make the decisions) it found the need to manage their firms remotely and get up to speed with new tech to be their paramount consideration. For juniors, isolation is their primary concern: two-thirds (66%) of junior lawyers feel isolated compared to 37% of senior (in age and experience) lawyers. They miss the buzz of the office and the networking opportunities it offers, the research finds, while reduced support and oversight from managers is also cited as a concern.

Looking to the future, more than half of younger solicitors want to retain some form of home-working after the crisis. But, interestingly, juniors are keener to return to the office in some form at least. It is seniors who are more likely to prefer working from home indefinitely in greater numbers.

O’Connor said: “Our 2020 research shows that whilst COVID-19 has brought new stresses and strains to the legal world, it appears to have been the long-awaited catalyst for action on wellbeing.”

He continued:

“But the story is complex. With COVID-19 suppressing business, work pressures have naturally eased. This will have helped to alleviate stress and reduce working hours. But as workload picks up — will this remain?”

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Newly qualified Katherine Gilroy said her mental health had suffered from overwork

A newly qualified solicitor who worked herself into a state of nervous collapse has been struck off for trying to cover up a £3,000 costs order against her client.

The Solicitors Disciplinary Tribunal (SDT) found that Katherine Gilroy, who suffered from work-related anxiety and depression, had demonstrated “a very serious lack of integrity” by failing to own up to a mess that she claimed was due to overwork.

Gilroy had only been qualified for about a year when she sat on escalating correspondence demanding payment of a small costs order, hoping to conceal the fact that she hadn’t dealt with it right away.

The disciplinary judgment striking Gilroy off the roll of solicitors contains a statement of agreed facts, but redacts the name of her employer.

Gilroy joined the firm as a paralegal in 2014 and qualified as a solicitor in January 2017. From the beginning of her time at the firm, she had been dealing with a client, AT, who was suing his business partner.

As part of the litigation, the firm applied for pre-action disclosure on behalf of AT. The application succeeded, but the client was ordered to pay costs of £1,500 plus VAT after the documents had been disclosed.

Disclosure was duly made “towards the end of May 2017” — triggering the £1,500 payment. The solicitors on the other side, Carpenters, started asking for the money in July.

Here’s where things went wrong. Gilroy seems to have overlooked the first Carpenters letter demanding payment, telling the tribunal that this was “due to her other workload”. When Carpenters sent a chasing letter three weeks later, she “panicked” because she hadn’t told her boss about the first demand and “was afraid of what the consequences would be” for not dealing with it promptly.

But the under-pressure junior wasn’t able to make the costs issue go away. After several chasing letters and warnings, Carpenters secured a second court order requiring Mr AT to pay £2,700 within 14 days. In November, it took the issue to the County Court.

A “panic-striken” Gilroy didn’t tell her client or counsel about any of this correspondence either. Apart from a response to one of the chasing letters asking Carpenters to hold fire, she “failed to take any action or bring the matter to the attention of the client”.

By December 2017, the amount owed was £3,100 and Carpenters had written directly to Mr AT notifying him of a charging order they had now over his property. Gilroy’s supervisor and counsel were now in the loop — but they were under the impression that this had come out of the blue, as she continued to hide the earlier warnings from Carpenters that they would go to court over the money.

By now Gilroy “felt like she was in a hole” and “could not see a way out”. Playing along with the fiction that Carpenters were the ones in the wrong, she even drafted a letter for sign-off containing statements that she knew were “incorrect or disingenuous”, such as that the charging order had come “without notice”.

She then pretended to email this letter to Carpenters, but used an address that she knew would bounce back. Despite getting a delivery failure notification, she forwarded the email to the client as though it had been sent.

A few days later, Gilroy came clean, admitting that she hadn’t sent the letter as it was “not true and that she had been aware of the court orders” all along. She resigned following an investigation and eventually wound up before the SDT.

While admitting most of the allegations against her, Gilroy insisted that she had not been dishonest or malicious.

She had been in a bad way with her mental health, saying that she had “struggled to deal with the pressures of working in a small law firm” and felt like she was “carrying the weight of an entire law firm” on her shoulders despite being newly qualified.

Gilroy also suffered from “work-related anxiety and depression”, producing medical evidence of her “history of work-related stress… for which she had received medication over an extended period”. At times she reported “physically collapsing”. She added that she had no such issues since leaving the firm.

These claims weren’t part of the agreed-upon facts, however, and the disciplinary panel brushed off her depression and inexperience as mitigating factors. The SDT found that Gilroy’s conduct was “deliberate, calculated and repeated” and involved “a very serious lack of integrity”, concluding that a strike-off was the right sanction. She also owes costs of £3,301.

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