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Salary reviews – any change?

Its that time of the year when many of our clients that specialise in defendant/insurance litigation ask us as legal recruitment experts to provide an opinion on salaries for the year gone by and the year ahead.  Questions we get asked largely relate to salary trends, what certain practice areas pay their staff and does this differ from team to team, are there any regional trends in the market, what bonus schemes are in place and what salary bands look like for paralegals, legal executives, NQ to associate level solicitors and partners?

Salaries have been largely static but 1 or 2 areas of practice have seen slight rises, however, there have been a decrease in salary levels in 1 or 2 other areas.  Some firms still have in place set salaries dependant upon PQE so these will see on average 2-4k increases.  Other firms will only award cost of living increases as there isn’t budget to increase significantly, others there will be no increase at all. In respect of personal injury, firms have used the split in damages and specialist teams to change pay scales so less profitable practice areas pay less than higher value teams.

Regionally Birmingham, Liverpool and Manchester have been very active in respect of active vaca within defendant/insurance litigation.  Manchester sees the highest number of insurance vacancies.  Fraud positions are particularly high in number in Manchester and more recently in Birmingham too.  You have more personal injury and defendant professional indemnity teams in the North West than anywhere else in the country so the pool of potential candidates is greater than that in Birmingham or anywhere else in the regions.

Bonus schemes seem to be more prevalent in claimant PI than in defendant PI.  If a claimant firm offers a bonus scheme it will typically be based on a % of their billing over a set threshold sometimes on a monthly basis.  Defendant teams typically now award for over achievement although more often than not its awarded annually and can vary on average from 2-5k and its based on meeting both your billing and chargeable hours target.  Chargeable hours targets seem fairly achievable, however, billing targets are getting harder due to recovery rates and more competitive pricing structures depending on what area of practice.

So no massive changes.  I think the main change in respect of remuneration is the doing away with set salaries for each level of PQE within some insurance practices.  Most insurance firms prefer now to remunerate staff based on what they do rather than their level of PQE.  This system rewards sensibly against lawyers responsibilities and the turnover versus profitability of the team.  This seems pretty sensible to me!

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