Allen & Overy raised some eyebrows earlier in July when it decided that it would not be taking part in the latest iteration of the war for junior talent. The firm chose to hold its current newly qualified pay rate steady at £107,500—which, while hardly a figure to be sniffed at, is way behind the staggering amounts handed out by U.S. firms in London such as Akin Gump Strauss Hauer & Feld, which upped its salary to £179,000 two weeks ago.
A&O’s decision puts it behind elite U.K. rival Freshfields Bruckhaus Deringer, which upped its own rate to £125,000 earlier this year.
Speaking to Law.com International, A&O global managing partner Gareth Price said the decision was “a prudent one”.
“There wasn’t a single factor behind the decision, we took into account lots of different things. We’re all clearly entering a more challenging business environment in general and there has been a softening of [client] demand in recent months,” he added.
As fears of a global recession loom and a cost of living crisis hits many parts of the world, including the U.K., some law firms have handed out bonuses to their people on the lower end of salary scales to support them. A&O currently has no plans for a similar scheme.
Price pointed out that the firm raised NQ salaries twice last year – once in June, and again to its current rate in October, and that over the past five years, the figure has risen by 33%. That’s way ahead of inflation, he said.
“I wouldn’t advise any young person to make a decision about where to work based just on money. The culture and environment matter a huge amount,” he added.
Building on the firm’s treatment of its people during the pandemic is hugely important to Price, who said a recent satisfaction survey undertaken by the firm found that 87% of respondents said that A&O was a “great” place to work. Looking forward, he is focusing on ensuring people stay happy at the firm: “You can’t afford to be complacent. We want people to feel at home, and we don’t want then wasting an ounce of emotional energy here.”
The past two years have particularly honed his view. The entirety of Price’s managing partner term so far has been dominated by the pandemic. He said: “We’ve lived through two traumatic years, when a lot of people were just managing to put one foot in front of the other.”
Despite those difficulties, the firm has achieved another record year of financial results, bolstered by its expansive push into the U.S. The firm’s offices there brought in around £87 million more in revenue than it did in the previous year, and Price is clearly hugely proud of the efforts there.
Looking East, and taking into account the pressures currently facing the business community in Hong Kong, Price said the firm is still very committed to its base there, despite some other firms pivoting recently in favour of Singapore.
As for the firm’s daily working habits, Price said most of its global network of bases have people working remotely for around 40% of the time.
When they are in the office, A&O lawyers are looking a little more casual these days, Price said, especially in London’s current heatwave. He draws the line at shorts, though: “Nobody needs to see my legs.”
