City solicitors face big salary slowdown

Salaries for City solicitors remain high but May's annual salary review will see belts being severely tightened, firms and recruitment consultants warned this week.In a survey of 38 firms and 162 in-house teams Michael Page Legal showed that newly qualified lawyers in a top tier London firm earn an average of 50,000 - 11% up on last year - while newly qualifieds in industry have seen average salaries increase 10% to 28,750.Although the salaries have continued to rise, albeit less dramatically than in previous years, recruitment consultants predict that May's traditional annual salary reviews will see a major slowdown in the increases of past years.'This survey shows that although firms are confident in the state of the market, they are markedly less confident now than they were six months or a year ago,' said Michael Page director Peter Thompson.

'It is very possible that firms will put a stop to the huge salary leaps that we've become used to.'Joanne Street, senior consultant at Hays ZMB, agreed.

'The salary freeze will affect newly qualified solicitors most acutely,' she said.

'Firms cannot afford to lose more senior lawyers who can proactively manage deals, and so four-to-five-year qualified lawyers will probably see a slight increase, to keep them sweet.

'Firms simply do not need the cannon fodder of so many newly qualified solicitors, and I will be very surprised if their salaries rise.' Alistair Dawson, head of human resources at City giant Clifford Chance, said: 'We are still watching the market to see how things develop, because May is a long time away.

It is true to say that there is not a great deal of recruiting and movement at the moment, and so I would not be surprised if freezes on some salaries were implemented.'His counterpart at Linklaters, Geoff May, said: 'We haven't yet decided what our salary increases are or are not going to be, but it's fair to say that the market is very quiet at the moment.'Despite the prospect of salary freezes, almost half of the firms (47%) predicted a recruitment growth of 5-10% over the next year, with a small number (3%) even predicting expansion of more than 20%.

The survey also showed signs of an increasing confidence in the long-term stability of the market.

More than half the firms surveyed (57%) saw a skills shortage as the major bar to future growth, compared to just 23% who cited the economic climate as the major factor.Victoria MacCallum