Average legal bonuses reach 32%
Average legal bonuses reach 32%
City legal bonuses reached an average 32% this year (up from 25% last year), meaning average payouts were £35,500
Base salaries for City lawyers rose 4% to £111,000, taking total annual remuneration to £146,500
Despite pay growth, 56% of lawyers say they are pessimistic about 2012
Average bonuses for City lawyers rose to 32% in 2011, according to research by international legal recruiter Laurence Simons.
The average City legal bonus was £35,500 – up from £26,500 in 2010. However, the number of lawyers who received a bonus fell last year from 73% in 2010 to 65% in 2011.
Average annual salaries for lawyers rose to £111,500 in 2011, up 4% from £107,000 in 2010. This meant total pay in 2011 was £146,500, rising 10% from £133,500 in the previous year.
The growth of legal salaries was almost twice that of those in other professions. Accountants, for instance, saw their basic pay increase by only 2.1% in 2011. Across the UK, salaries increased only 1.2% in 2011 .
Lucinda Moule, managing director of Laurence Simons said: “2011 saw sustained pay growth for lawyers in the UK, on the back of some early economic confidence. This has boosted legal salaries for professionals who endured pay freezes in 2010. Salaries and bonuses have also been pushed up by the limited supply of talent in their market, making retention the name of the game for employers. A tough 2010 means employers have focused primarily on boosting salaries rather than increasing headcount”.
“There may well be some choppy economic waters to be navigated in 2012, but in the last 12 months employers have demonstrated they are prepared to prioritise investment in legal teams over other business functions”.
Along with the rise in pay in 2011, 86.5% felt their job was secure and less than 15% saw a reduction in headcount in their offices.
Laurence Simons found 56% of lawyers said they felt pessimistic about their earning prospects in the next 12 months. The news follows research by Laurence Simons which shows lawyers are among the most pessimistic professionals in the UK. Professionals were asked to rate their confidence in the jobs market within their industry from 10 (very optimistic) to -10 (very pessimistic), with lawyers providing an average score of -7.8. By contrast, accountants scored 0.1 and HR professionals scored 2.4.
Lucinda Moule continues: “Even though lawyers are naturally cautious creatures, the extent of their pessimism in 2011 is hard to understand when you look at their pay. 2011 also saw bonuses grow.
“Of course, there are some reasons for lawyers to feel concerned about the economic future. The memory of 2009’s pay and hiring freezes seems to have stuck in the minds of legal professionals, even if at the moment they are enjoying the financial consequences of their growing prominence in their clients’ and employers’ operations”.
Men, who said they would require on average a 19.2% rise to move, expected more than women who expected only 13%. Men also had on average greater experience in their roles than women, possessing ten years four months’ experience compared to nine years for women.
Moule continues: “There’s a stark difference between the expectations of men and women. The results suggest women are prepared to take factors other than salary into consideration when mulling over a move. Issues like work life balance and office culture tend to mean more to women than simply the bottom line. But the figures also show men tend to appraise their earning potential with more confidence – and there’s no good reason why women shouldn’t follow suit to close the expectations gap”.
Laurence Simons’ research found that international legal salaries have performed as strongly as in the UK. In Brazil, lawyers can expect to receive an average salary of £175,000 – 57% higher than the UK average. In Dubai, the average salary has reached £117,800. When asked whether they would consider a move abroad for a suitably attractive role, 67.5% of lawyers stated they would.
Lucinda Moule concludes: “The market in emerging economies – particularly the BRIC countries is experiencing strong growth. Only a month after Brazil overtook the UK as the world’s 6th largest economy, this research shows lawyers can expect £64,000 more working there than in the UK. Basic salaries are also higher in the UAE and when you factor in the fact Dubai residents don’t pay income tax, the uplift is substantial. No wonder two thirds of lawyers would be prepared to move abroad for the right position”.