Articles From the Team
Birmingham private practice legal salary review - 2022
From Angharad Warren
Birmingham is one of the UK’s key legal hubs and it has seen steep salary increases, for junior lawyers in particular, during the past year.
Most of our client law firms were recruiting for record levels of vacancies last year, and competition for solicitor candidates was tough.
Many of our Birmingham lawyers started to consider roles in the City, with hybrid working having made the commute to London, particularly from the Midlands, a very viable and financially sensible option. Gone are the days that employers expect their employees in the office five days a week, and so the time and cost implications mattered less than in pre-pandemic times.
Aggressive salary increases
Off the back of this, national and international firms with offices in Birmingham (and other legal hubs) responded by aggressively increasing their salaries during the first half of 2022 in order to retain and attract talented lawyers who might otherwise have been lost to London.
DLA Piper led the way, boosting NQ rates in the regions to £65,000, closely followed by Eversheds Sutherland to £62,000 and Squire Patton Boggs initially increasing to £55,000, with a further increase due to take effect from January 2023 taking that to £65,000.
Gowling WLG, Pinsent Masons, Gateley and Trowers & Hamlins have also all boosted salaries to compete. Hogan Lovells made a bigger shift recently hiking its Birmingham NQ salary from £53,000 to £70,000 – a 32 per cent increase, so they currently stand as Birmingham’s top payer for NQs (but recruit at lower levels than some of their competitors given local office size).
Strong national firms have also increased their NQ rates quite significantly, with Freeths at £54,000 (which would have been a market leading salary just eight months ago!), while Shoosmiths increased to £58,000 in November.
These are unprecedented salary increases for regional lawyers, and other national and international firms we work with are also set to announce their salary reviews shortly, the results of which we expect to further divide the top payers from the lower end of the market.
As well as increases at the newly qualified level, the knock-on effect up the chain has also been significant, as salary bandings have been realigned.
In this market, we are regularly seeing salary increases of 20 per cent or 30 per cent (sometimes more) for more senior lawyers on a move. However, the increases at the top end of the market are generally less than those we are seeing at the junior end, so it remains to be seen whether this will create some discord internally.
We have also seen an increase in counter-offers from smaller regional and boutique firms which have responded where required to keep hold of their best people. Some of these counter-offers have been really surprising (given the size of some of the firms involved) but it show that when smaller firms really want to keep their talent they can also respond fiercely.
Where’s the money coming from?
With such huge salary increases, where will the additional budget come from? It might be that firms squeeze more time/fees out of their lawyers to help cover the additional cost to firms and their partners.
Perhaps we will see a shift in the more senior end of the legal market, with partners opting for London/US firms if they suffer a significant dip in profits, or perhaps clients will bear those additional costs, in which case will they transfer work to firms that can service their work at a more competitive rate moving forward? It will be interesting to see how it plays out.
Historically, the difference in salaries for NQ lawyers in Birmingham has been far narrower so, in the case of multiple offers, candidates would often opt for the firm that they felt could offer them the most fulfilling career overall rather than an additional £5,000. Over the past six months or so we have found candidates to be more conflicted than ever in their thinking.
Rightly or wrongly, the assumption has always been that a smaller firm means improved hours/lifestyle balance and a friendlier environment. That can often be the case, but it certainly isn’t in every situation, and many of the larger firms have excellent cultures, improved diversity and more admin/junior support coupled with more sophisticated IT systems which all help to make the job easier.
With it being harder than ever for young people to get on the property ladder and salary differences of over £20,000 for newly qualified lawyers in the major city centre firms in Birmingham, pay is going to be a more significant and often deciding factor moving forward.
The recent salary increases have undoubtedly improved retention rates at many of the larger regional firms and saved significant departures. They have also made open vacancies easier to fill, hence the slight settling in new vacancies coming to market now.
Effect on those left behind
Those firms that can’t pay the higher rates (perhaps because of the fee rates they charge their clients) and have found it harder to fill their vacancies, in some cases having lost staff to their higher paying competitors, are now in a difficult situation where, in some cases, their teams are becoming overworked as a result. The knock on effect of these increased salaries goes further than just money and can affect the whole culture of those firms.
While Birmingham salaries will never be able to compete with those on offer in London, the levelling up we have seen this year has given our Birmingham lawyers a very good reason to stay put and helped to keep many from the lure of London. The lower cost of living and more balanced lifestyle that you can achieve in Birmingham is undeniable and, following the Commonwealth Games, the UK’s second-largest city is also now clearly on the global map too.
Career progression can also often happen at a quicker pace in the regions, and quality of work in Birmingham is excellent, with work stemming from teams led from Birmingham (often where firms have London offices too), and also through many teams operating nationally so that City quality work is often carried out in Birmingham.
If you require any specific market/salary information, please contact BCL Legal.
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