UK 4 years’ PQE & 5 years’ PQE SALARIES OUTPERFORM MORE SENIOR IN-HOUSE SALARIES

In the UK, 4 years’ PQE and 5 years’ PQE salary bands have increased

most since 2004 while 9 years’ PQE and 10 years’ PQE salaries have

fallen furthest

- Russian lawyers see greatest increases in salaries over last 6 years

- Salaries fall most in Spain & Belgium – but Poland still has worst pay

in EU

Over the last six years, 4 years’ PQE and 5 years’ PQE salary bands in

the UK have increased more than others, according to international

legal recruiter Laurence Simons. Salaries of 5 years’ PQE in–house

lawyers have risen 7% over the last six years while those of 4 years’

PQE lawyers have risen 14%. In 2004, a 4 years’ PQE salary was worth

£57,000. That has now risen to £65,000. 5 years’ PQE salaries have

risen from £65,750 in 2004 to £70,500 today.

The research shows the big losers of the downturn have been the 10

years’ PQE and 9 years’ PQE salary bands. In 2004, the average 9 years’

PQE salary was worth £89,000. But by 2010, average salaries at that

level had fallen to £84,750 – down 5%. Average salaries at the 10

years’ PQE level have been hit even harder. They fell from £95,500 in

2004 to £89,000 (down 7%) in 2010.

Naveen Tuli, managing director of Laurence Simons said, “Many

people assume senior lawyers suffered the least during the downturn

but as far as in–house roles go, that’s wrong. Our research shows that

4 years’ PQE and 5 years’ PQE salary bands performed

proportionately much better than 9 years’ PQE and 10 years’

PQE - perhaps reflecting the ‘sweet spot’ at which most legal

departments look to hire in lawyers to their teams. Over the last 18

months or so, those companies that have been in the fortunate

position to be hiring in-house staff have tended to

focus on those with slightly less experience as such 4 years’ PQE and 5

year’s PQE lawyers have been in demand and that has driven up

salaries.”

Rachael North, director of Laurence Simons adds, “This has been

particularly

noticeable in the technology and telecoms sectors. The increasingly

rapid pace of

digitization and the widespread adoption of mobile broadband have

meant the

telecoms and technology sectors have ridden out the global downturn

relatively

well. Although 2009 saw some salary freezes and non payment of

bonuses, in

2010 the market has shown slow, but steady signs of improvement.”

INTERNATIONAL WINNERS & LOSERS

The research, which was gathered over the course of six years and

collated data

from over 14,000 in–house lawyers throughout the world, also showed

salaries in

Russia had performed better than any other country in the world. Pay

at the 2

years’ PQE level has increased 81% from 2004, up from €25,000 to

€45,250 in

2010 (UK: +15%).

Meeta Dutt, manager for Russia, Central & Eastern Europe at

Laurence Simons said, “By 2004, the concept of an internationally

staffed in–house legal department had become accepted by local

Russian companies keen to float on international stock exchanges.

The result of that, alongside the boom in the energy, metals,

consumer, and technology sectors, was intense competition both for

the best local lawyers and those trained in the UK or US, who could

demonstrate good cross–border corporate finance and M&A

transactional experience. In the last five years business focused

lawyers with generalist commercial skills in both multinational and

domestic companies have become increasingly more sought–after.”

GLOBAL SALARY DECREASES – SPAIN & BELGIUM

The story was very different in Belgium and Spain. In Belgium, 2

years’ PQE salaries have fallen 29% over the same period while

salaries in the 4 years’ PQE band have fallen 26% (UK: +14%).

Tanja Albers, european in-house manager at Laurence Simons said,

“The Spanish in–house market remains something of a ‘closed shop’

with few if any organisations recruiting outside the country. Salaries

have been hit by this and the substantial damage done to the Spanish

economy by the recession. There’s little sign of early recovery there.”

POST BOOM RECOVERY

Although the downturn didn’t hit Russia particularly hard – with the

worst affected salary band (10 years’ PQE) still rising 5% from 2008

(€89,750) to 2010 (€94,250) – the real winner post the 2008

watershed has been the Middle East. The largest increases across

salary bands from 5 years’ PQE to 10 years’ PQE have all been recorded

in the Middle East, with the 5 years’ PQE band rising 41% from

€123,000 to €173,000. Since the boom, the worst cuts at a more junior

level have occurred in Spain. More senior salary bands, have been hit

hardest in Germany. The average 10 years’ PQE salary in Germany has

fallen 31% – from €135,000 in 2008 to €93,750 in 2010.

Tanja Albers said: “We do not expect to see much improvement in

senior pay levels in Germany until well into the second half of the year.”

Mark Anderson, Middle East manager at Laurence Simons added, “The

situation is better in the Middle East. Despite Dubai’s well–documented

economic woes, the Gulf region as a whole has held up relatively well

through the downturn. But even here, the boom time for lawyers is

most definitely over. Over the last twelve months, pay levels have

remained flat with little sign of any early rise.” Meeta Dutt adds,

“Russia’s going through something similar, too. Candidates with good

international experience are still demanding high salaries. But looking

to the future, the expectations of huge pay increases so common in the

boom years have been consigned to history.”

EUROZONE SALARIES – A SNAPSHOT COMPARISON

Within the Eurozone, at all levels, the highest salaries are to be found

in Ireland. The worst paid in–house lawyers with less than 3 years’

experience are to be found in Spain. The worst paid in–house lawyers

with more than 3 years’ experience are to be found in Poland.

Naveen Tuli said, “The market for in–house lawyers in Poland is a

relatively new one but is being fuelled by a growing desire to keep the

cost of legal services down to an acceptable level. Despite the

increasing number of in–house lawyers in the country basic pay still

tends to be lower than that on offer in law firms. The average in–house

lawyer with 10 years’ qualified experience can earn €113,000 a year in

Ireland but only €63,750 in Poland.”

GLOBAL FORECASTS – HEADCOUNT, THE ECONOMY, & BRAZIL

82% of lawyers interviewed said they thought headcounts at their

current employer would either increase or remain static over the

course of the next 12 months. While 56% expect them to remain

unchanged, 26% of in–house lawyers predict their office numbers are

going to rise over the course of the next year. And when asked about

the future of the global economy over the next twelve months, 66% of

respondents described themselves as “optimistic” or “extremely

optimistic”. Only 24% said they were either “pessimistic” or “extremely

pessimistic”.

Laurence Simons said Latin America, and specifically Brazil would drive

international growth in in-house legal jobs over the coming year.

Pedro Amaral Dinkhuysen, Latin American managing partner at

Laurence Simons said, “While the boom times are over for the Middle

East, certainly for the short term, the market in Brazil – where we are

seeing a huge influx of law firms into Sao Paulo and Rio – is very strong.

This has caused a noticeable upward pressure on pay – in some cases

by as much as 20% for in–house lawyers and 30% for law firm

practitioners. Lawyers with solid experience in corporate, banking,

compliance and tax are most in demand and able to command a

premium to move in the current climate.”

Company Name – Laurence Simons

Website - http://www.laurencesimons.com/

Address - 322 High Holborn, London, WC1V 7PB

Telephone - +44 (0)20 7645 8500