Derivatives lawyers' pay trumps M&A counterparts

M&A and capital markets lawyers in investment banks have become the poor relations of lawyers working with derivatives products.

A salary survey of over 100 banking lawyers by Taylor Root, a legal recruitment company, found derivatives lawyers earned substantially larger bonuses than their counterparts in other areas of the bank.

Last year, lawyers with three to six years' experience working with derivative products earned average base salaries of 62,000 to 85,000 plus 35%-95% bonus. By contrast, capital markets lawyers with three to six years' experience earned average base salaries of 57,000 to 85,000 plus bonuses of 37% to 54%. Pay was highest at large US banks.

The discrepancy was even more significant at senior levels. Heads of departments working with derivatives products earned average salaries of 127,000, plus bonuses of 85% to 260%. Average salaries for their counterparts in capital markets were 107,000, while bonuses were 65% to 135%.

Julian Stone, a consultant at Taylor Root, says lawyers in M&A earned similar salaries and bonuses to their colleagues in capital markets: 'The heyday of huge bonuses for M&A lawyers was in 1999 and 2000.'

Higher pay for derivatives lawyers reflects their scarcity, says Stone. 'Credit or equity derivatives lawyers, are a rare breed and have no problem finding jobs,' he said. 'But banks looking to hire M&A lawyers or capital markets lawyers are spoilt for choice.'

sbutcher@efinancialcareers.com