The seasonal rounds of salary rises for law firm associates are flooding in. The UK City firms are paying newly-qualifieds around £64,000, with one-year qualifieds getting between £66,000 and £70,000. US firms are paying more in London: Shearman & Sterling are offering £75,000 and White & Case are paying £76,000. By contrast, in New York, first year associates are now being offered as much as $160,000, often with more generous bonuses than their London counterparts.
While these numbers may seem high to some (well, to academics they do), they essentially reflect the supply and demand for "grinders" in the legal factory. Law firms consist of three basic categories of lawyer: finders (the rainmakers who bring in the business); minders (those who supervise the work and look after the "finders'" clients); and grinders (the fodder straight out of law school who are the grunts). If you succeed as a lawyer, you will rise up through these ranks--partner and associates cut across these--to gain kudos, cash and clout. This assumes a transparency in the system so that all the participants know what's in for them.
It's no surprise that opacity rather than transparency rules, especially in London. And the big law firms do well by this. By spreading confusion and mystifying the processes, most associates don't have a clue. They work very long hours--you better hit 2,200 billable hours a year--without thinking what they are doing. The senior partner of Clifford Chance once said that the relentless mill of transactions pretty soon induced burnout in most except the for the strong.
Most London associates have no idea about how to make partner (or even how law firms operate), that is what to do, when to expect it and so forth. Disillusionment sets in early for many these day and so they opt to go inhouse, an increasingly common move. At least in the US there is more information and knowledge of the process, and certainly it is studied more than in London.
Looking at salary differentials, one would think there would be a mass migration from UK to US law firms in London. But there isn't. Again, myth and mystification have a lot to do with this. In part it is due to London law firms having created a class system of law firms that reflects the English class system. So a firm like Slaughter and May sits at the top while other firms try to rise to their lofty heights. Some firms like Linklaters try to appear classless, but aren't. And of course our law schools are similarly situated, which leads to the question: how many good prospects are missed because firms won't look at entire categories of law schools? For all their sophistication, they often make simplistic assumptions, but that's another topic.
This class system is transmitted to law students and associates with some force. How, when, and why I don't know. The only comparison I can think of is to young kids learning about sex from their schoolmates and getting it horribly wrong. It places American law firms in an anomalous situation because they don't neatly fit with the English firms, even though their hierarchies are as fixed as ours. To move to a New York or LA firm is to abandon one's roots with the fear that there may be no way back. The lure of higher salaries doesn't always compensate. Although interestingly in the case of Magic Circle partners that particular trait of American firms has become enticingly attractive.
Add to this the growing tendency of big law firms to de-equitize partners and introduce multiple tiers of partnership, the confusion can only get foggier. And I haven't even mentioned the problems that pertain to women and minorities in law firms, and that too is another topic.
Perhaps with London becoming the global financial centre du jour over New York, there will be less mystery around these things. Maybe the American law firms will really shake up the pack as they do in New York from time to time. Personally, I think all law students, whether in a law degree or doing the CPE, should take a compulsory course in the legal profession to enable them to make better decisions about their careers. At the moment they are like lambs going to a very expensive abattoir.