Grass looks greener at law firms

It may lack the glamour of high finance but a legal career is enticing. The standard salary for a newly qualified solicitor in a City of London law firm has reached 50,000 (€69,500), rising to 64,000 three years later. Top US law firms in London have paid more - about 78,000 to newly qualified staff, blossoming to 90,000 after three years.

The package offered to associates in investment banks can look paltry by comparison. Associates, who are typically in their late twenties or early thirties with an MBA and several years of work experience, are paid a starting salary of about 55,000, rising to 60,000 after three years.

These days many receive small bonuses and, if they manage to keep their job, promotions are increasingly hard to come by.

An envious glance at friends who are lawyers will reveal salary increases of between 5% and 10% a year and a well structured route up the career ladder.

On top of this, law firms have survived the economic downturn relatively well. Mergers and acquisitions work is in the doldrums but other areas, such as insolvency and corporate restructuring, are thriving.

A survey by American Lawyer magazine found revenues at the world's 100 largest law firms rose 16% in 2002.

Clodagh Hayes, head of graduate recruitment at Linklaters, a leading London firm, says some of the students applying to join would previously have gone into investment banking. "You can see they think law will provide a more stable career."

There is a downside. A legal career requires lengthy training.

After leaving university, would-be UK lawyers must first complete a one or two-year conversion course. This is followed by a further two years' training once they join a solicitors' firm. During this period, pay is well below the post-qualification average.

Career progression is no longer as assured as it once was. While law firms seem unlikely to suffer on the scale of investment banks, there are signs they are tightening their belts as work becomes harder to find. Linklaters, KLegal and Norton Rose have paid some trainees as much as 14,000 to take a year off to defer their starting date.

When training finishes, there is no guarantee of a job. Joanne Street, a manager at Hays ZMB, a legal recruitment firm, says some of the top 20 London firms offer contracts to no more than 50% of their trainees. "It's tough. The people who don't get the contracts are moving to the provinces, going travelling or becoming teachers," she says.

For those who remain, the work is getting harder. Many law firms demand between 1,700 and 1,800 billable hours a year, with US firms expecting from 2,000 to 2,400. To achieve this, Street says staff must work 12-hour days.

Several firms have announced redundancies. Denton Wilde Sapte laid off up to 70 staff last month and Jones Day Gouldens said it was making cuts.

Street says lawyers with four to six-years' post-qualification experience are most at risk of the chop. "They are expensive and doing work that partners could be doing if there's nothing else."

Partners are not safe either. Nick Lloyd of search firm Hogarth Davies Lloyd says many live in fear of a call from the managing partner wanting to question their contribution. "People who thought they had job security for life are waking up to a new reality in which they don't," he says.

To cap it all, legal salaries may be on the way down. Penny Turndrup, a director at recruitment firm EJ Legal, says today's high salaries are a throwback to staff shortages of the late 1990s when first-year post-qualification salaries soared from 35,000 to 50,000.

She believes there is now little reason to keep salaries high. Clifford Chance has recently reduced pay for newly qualified lawyers from its previous level of 50,000.

As a result of this uncertainty, legal careers are showing similarities with investment banking. Partners, who are traditionally loyal to a single firm, are jumping ship in search of better pay.

Even so, the uncertainties of a legal career look trivial by comparison with banking. Law is also a useful platform for other careers. One recruiter at a leading solicitors says: "Students have worked out that if they go to a law firm, they will be funded through law school and are then guaranteed a minimum of a two-year training contract.

"The worst that could happen is that they will come away with a qualification that looks very good on their CV."

The long training period also makes the supply of lawyers finite. Lloyd says: "If you're smart, now is the time to get in to law. You will be worth a lot more later on."