Introduction
Summer rarely means rest for law students. By late July, penultimate-year students are already deep into vacation schemes, researching firms and preparing for applications. With thousands of firms to choose from, understanding salary structures and retention rates is essential.
Commercial firms, particularly those specialising in mergers and acquisitions, continue to dominate the upper end of the pay scale. Although first- and second-year trainee salaries are broadly similar across top firms, the gap widens significantly at Newly Qualified level due to the ongoing city pay war. Firms have increased salaries annually to remain competitive, but pay should never be the sole factor. A low retention rate may indicate difficulty securing a permanent role after qualification.
Below is a general overview of salary and retention trends across Magic Circle, Silver Circle and White Shoe firms.
Magic Circle
Firm First Year Second Year NQ Retention Rate
Clifford Chance £50,000 £55,000 £125,000 70 percent
Linklaters £50,000 £55,000 £107,500 94 percent
Allen and Overy £50,000 £55,000 £107,500 87 percent
Slaughter and May £50,000 £55,000 £115,000 82 percent
Freshfields £50,000 £55,000 £125,000 89 percent
Magic Circle firms are known for high pay and strong training. Retention rates fell after the pandemic. Clifford Chance saw the largest drop, from 87 per cent in 2019 to 70 per cent. However, Clifford Chance also saw one of the largest NQ salary increases, rising from £100,000 to £125,000. Linklaters has the highest retention rate but offers one of the lowest NQ salaries in the group.
Silver Circle
Firm First Year Second Year NQ Retention Rate
Ashurst £50,000 £55,000 £105,000 85 percent
Herbert Smith Freehills £50,000 £55,000 £105,000 83 percent
Bryan Cave Leighton Paisner £48,000 £52,000 £95,000 72 percent
Travers Smith £50,000 £55,000 £100,000 71 percent
Macfarlanes £50,000 £55,000 £107,500 92 percent
Baker McKenzie £50,000 £55,000 £110,000 87.5 percent
Silver Circle firms generally have lower retention rates than Magic Circle firms, partly because their trainee intake is smaller. Both groups specialise in finance and mergers and acquisitions, but Silver Circle firms typically have lower turnover.
Salary differences between Magic Circle and Silver Circle firms are not dramatic. Baker McKenzie and Macfarlanes have kept pace with Magic Circle growth. Baker McKenzie’s most recent NQ salary rise took effect on 1 July 2022, and similar adjustments across the Silver Circle are likely.
White Shoe
Firm First Year Second Year NQ Retention Rate
Hogan Lovells £50,000 £55,000 £107,500 75 percent
White and Case £52,000 £57,000 £140,000 83 percent
Davis Polk and Wardwell £60,000 £65,000 £160,000 N/A
Mayer Brown £50,000 £55,000 £105,000 83 percent
Covington and Burling £48,000 £53,000 £151,000 100 percent
Shearman and Sterling £50,000 £55,000 £145,000 81 percent
Latham and Watkins £50,000 £55,000 £151,739 96 percent
Sidley Austin £50,000 £55,000 £148,500 85 percent
Goodwin Procter £46,000 £50,000 £147,000 83 percent
Jones Day £52,000 £59,000 £110,000 67 percent
Reed Smith £45,000 £49,000 £107,500 86 percent
Weil, Gotshal and Manges £60,000 £65,000 £160,000 90 percent
White Shoe firms are known for exceptionally high pay. Many offer NQ salaries that exceed Magic Circle rates by 25% or more. However, expectations match the pay. Workloads are heavy, hours are long, and work-life balance is often challenging. Insiders report that early starts and late finishes are routine. This may explain why retention rates do not always match salary levels.
Even so, given the complexity and scale of the transactions these firms handle, demanding work is expected.
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