Quarter 2 Overview
After a relatively slow start to the year within the legal recruitment market, firms have now started to show a significant increase in activity levels – not just in the UK but also across Europe. Because of this, we anticipate that the rest of the year will be busy, as firms are condensing their yearly growth plans into a tighter timeframe.
Understandably, candidates were quite risk-averse heading into Q2 on account of increased media coverage about an impending recession in the UK. This was something that we have certainly seen dissipate throughout Q2: confidence grew significantly, as people realised that the UK was likely to largely avoid a recession, and workflows increased.
Hiring Activity
There is no doubt that hiring levels rose substantially in Q2 of 2023. In late 2022 and early 2023, we saw decreased hiring levels owing to the turbulent nature of the economic landscape. As a result, numerous firms paused recruitment in Q4 of last year and the first half of Q1 this year. Over the last few months, many firms have since restarted their hiring plans and we saw this increase dramatically throughout Q2.
In terms of which businesses have seen the highest levels of activity, ‘Big Four’ firms are continuing to be very active. For example, Ernst & Young and KPMG understandably have a large appetite, and are leveraging the current market conditions to hire. Meanwhile, Kirkland & Ellis have continued to grow in London. We have also seen rapid expansion across Europe, with firms really investing in areas such as Germany, Ireland, Belgium, and France.
Salary Levels
Around this time of year, firms start to release their Newly Qualified (NQ) salary levels. Many firms have increased this significantly, notably including Linklaters, who increased their pay by 16% to bring it in line with Clifford Chance and Freshfields. Additionally, Macfarlanes have increased their NQ pay to £115K, highlighting the forthcoming battle for good junior talent that we are likely to see later this year.
Forecast for Quarter 3 2023
Looking ahead to Q3, we expect to see an uptick in hiring levels again. This is anticipated to extend beyond the NQ market, which will almost certainly be very competitive, especially in areas such as Private Funds, Corporate Tax, and Competition.
Salaries are also predicted to continue rising, as firms will still be vying with their competitors to attract talent in an ever-challenging market. This is becoming increasingly more difficult as US firms continue to have a larger market share, which is causing Magic Circle, Silver Circle, and other top UK firms to try and compete on remuneration.
Challenges for Candidates & Firms
One of the biggest challenges for candidates is that many NQs will be presented with more opportunities than previous class years. Previously, it was the norm to stay where you trained if the chance arose – now, many candidates will rightly want to do their due diligence.
For employers, simply put, the NQ market this year is going to be very challenging. Candidates will have more prospects than previously in many sectors and, as a result, firms are going to have to compete to retain their current trainees, as well as to attract outside talent.
[/fusion_text][fusion_text columns=”1″ margin_right=”0px” margin_left=”0px” column_spacing=”150″ hide_on_mobile=”small-visibility,medium-visibility”]Quarter 2 Overview
After a relatively slow start to the year within the legal recruitment market, firms have now started to show a significant increase in activity levels – not just in the UK but also across Europe. Because of this, we anticipate that the rest of the year will be busy, as firms are condensing their yearly growth plans into a tighter timeframe.
Understandably, candidates were quite risk-averse heading into Q2 on account of increased media coverage about an impending recession in the UK. This was something that we have certainly seen dissipate throughout Q2: confidence grew significantly, as people realised that the UK was likely to largely avoid a recession, and workflows increased.
Hiring Activity
There is no doubt that hiring levels rose substantially in Q2 of 2023. In late 2022 and early 2023, we saw decreased hiring levels owing to the turbulent nature of the economic landscape. As a result, numerous firms paused recruitment in Q4 of last year and the first half of Q1 this year. Over the last few months, many firms have since restarted their hiring plans and we saw this increase dramatically throughout Q2.
In terms of which businesses have seen the highest levels of activity, ‘Big Four’ firms are continuing to be very active. For example, Ernst & Young and KPMG understandably have a large appetite, and are leveraging the current market conditions to hire. Meanwhile, Kirkland & Ellis have continued to grow in London. We have also seen rapid expansion across Europe, with firms really investing in areas such as Germany, Ireland, Belgium, and France.
Salary Levels
Around this time of year, firms start to release their Newly Qualified (NQ) salary levels. Many firms have increased this significantly, notably including Linklaters, who increased their pay by 16% to bring it in line with Clifford Chance and Freshfields. Additionally, Macfarlanes have increased their NQ pay to £115K, highlighting the forthcoming battle for good junior talent that we are likely to see later this year.
Forecast for Quarter 3 2023
Looking ahead to Q3, we expect to see an uptick in hiring levels again. This is anticipated to extend beyond the NQ market, which will almost certainly be very competitive, especially in areas such as Private Funds, Corporate Tax, and Competition.
Salaries are also predicted to continue rising, as firms will still be vying with their competitors to attract talent in an ever-challenging market. This is becoming increasingly more difficult as US firms continue to have a larger market share, which is causing Magic Circle, Silver Circle, and other top UK firms to try and compete on remuneration.
Challenges for Candidates & Firms
One of the biggest challenges for candidates is that many NQs will be presented with more opportunities than previous class years. Previously, it was the norm to stay where you trained if the chance arose – now, many candidates will rightly want to do their due diligence.
For employers, simply put, the NQ market this year is going to be very challenging. Candidates will have more prospects than previously in many sectors and, as a result, firms are going to have to compete to retain their current trainees, as well as to attract outside talent.
[/fusion_text][fusion_text animation_direction=”left” animation_speed=”0.3″ animation_delay=”0″ hide_on_mobile=”large-visibility” sticky_display=”normal,sticky”]Salaries
UK London Permanent Salary Per Annum £
| Role | |
|---|---|
| NQ | £75k – £110k |
| 1 yr PQE | £80k – £120k |
| 2 yrs’ PQE | £85k – £130k |
| 3 yrs’ PQE | £90k – £138k |
| 4 yrs’ PQE | £95k – £140k |
| 5 yrs’ PQE | £100k – £150k |
| 6 yrs’ PQE | £100k – £160k |
| 7 yrs’ PQE | £120k – £170k |
| 8 yrs’ PQE | £130k – £200k |
US Firms (Cravath) Permanent Salary Per Annum
| Class | Salary | Bonus | Total |
|---|---|---|---|
| 22/23 – 1st Year | $215k | $20k | $235k |
| 2021 – 2nd Year | $225k | $30k | $255k |
| 2020 – 3rd Year | $250k | $57.5k | $307k |
| 2019 – 4th Year | $295k | $75k | $370k |
| 2018 – 5th Year | $345k | $90k | $435k |
| 2017 – 6th Year | $470k | $105k | $475k |
| 2016 – 7th Year | $400k | $115k | $515k |
| 2015 – 8th Year | $415k | $115k | $530k |
| Class | Salary | Bonus | Total |
|---|---|---|---|
| 22/23 – 1st Year | £162k | £15k | £177k |
| 2021 – 2nd Year | £170k | £23k | £193k |
| 2020 – 3rd Year | £190k | £44.5k | £234k |
| 2019 – 4th Year | £222k | £58k | £280k |
| 2018 – 5th Year | £261k | £69k | £330k |
| 2017 – 6th Year | £280k | £81k | £361k |
| 2016 – 7th Year | £303k | £88k | £391k |
| 2015 – 8th Year | £315k | £88k | £403k |
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