Salary survey: US competition pushes up pay for lawyers at UK banks

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The salaries of lawyers working for banks in the UK have been rising over the past year, partly because of competition from US law firms, according to the recruitment company Michael Page.

Newly qualified lawyers can now expect an average salary of 31,000 (€50,000), says a Michael Page survey of pay at banks, other financial services companies and insurance companies. Some earn as much as 42,000 while the worst paid receive 20,000.

Those with seven or more years of experience earn an average of 108,000, with a minimum of 66,000 and a maximum of 150,000. Heads of legal departments are paid an average of 165,000.

Around 500 legal departments were surveyed, with a 32% response rate.

Peter Thompson, director of legal business at Michael Page, said that the salary trend over the past year had been upwards, "reflecting the shortage of good candidates in the banking and finance markets."

"The banks and finance houses are having to compete with the top 15 UK law firms and also with the top 10-15 US law firms to recruit the good people," he said.

In the past five years US law firms in London had expanded in sectors such as project finance, capital markets, derivatives, securitisation and general banking law, he said.

US law firms were used to paying high salaries, he added. In New York a few newly qualified lawyers were being offered $110,000 (75,000) - $132,000 (90,000).

Thompson also commented that an increasing number of lawyers who joined banks in the UK later moved on to non-legal positions, often to develop their all-round commercial skills.

Pay levels of in-house lawyers this year may well be affected by the drop in M&A and other activity, he added. "We will have a better idea in three months, after annual pay reviews held in April and May."