The average annual salary for a newly-qualified City lawyer has soared to £185,000 a year according to London headhunter Robert Walters, as a war for talent in a tight labour market comes when reports of firms paying ”stupid money“ are rife.
Alan Bannatyne, chief financial officer and an industry veteran of 20-years’ standing, told the Standard the rise was “significantly up on everything” he’d seen previously, rising from £165,000 in January, in a trend that looks set to last.
“There’s a chance that ongoing, very strong salary increases will continue for a while yet,” said Bannatyne, adding that the shortage of qualified workers was “everywhere you look -- front office, middle office back office, with the financial services sector in growth mode,” as rising interest rates make it easier for the industry to make money.
Overall, Robert Walters reported what it called a “record first half” of its financial year, with profit before tax of over £26 million, up almost a quarter, from revenue of £538.6 million, up 16%. Net fee income in the UK rose 8% to £38 million.
The pound’s decline is also playing a role in lifting salaries.
Bannatyne said “part of the £185,000 salary figure was a “recallibrtion” because of currency factors. “Because of the pound’s weakness, they got a pay rise, effectively”, as US-based law firms peg wages back to the dollar amount.
“It will make people working for UK law firms think about working for a US firm also based in the UK.”
Bannatyne said the closest comparison to the state current jobs market was the “war for talent” of 2006. At that time, a boom in derivatives and the financialisation of mortgage-backed securities was gathering pace and ended in the financial crisis of 2007 to 2008.
“What is different now is that we have uncertainty,” he said, of the wider economic backdrop, but that any return to deeper confidence could add more fuel to the boom. “There is more upside potential than downside risk,” he said.
The company, named after its founder, dates back to 1985 and the “Big Bang” deregulation that transformed the Square Mile into a global trading centre and sparked a wave of takeovers as old restrictive practises were swept aside.
It has tracked the development of the City ever since, from the development to Canary Wharf into London’s second trading centre to the arrival of fresh tech jobs into new neighbourhoods such as Old Street and Shoreditch.
Robert Walters shares rose 0.8% to 536p in London on Thursday.