BSA 2024 Legal Salary Guide v3 SPREADS - Flipbook - Side 10
10
Key trends affecting legal
and CoSec recruitment in 2024
Over the coming year, various political, economic
and social factors are likely to have an impact on
hiring across in-house legal and CoSec roles.
Private practice salaries
In 2016, premier US law 昀椀rm Cravath, Swaine &
Moore unveiled its 昀椀rst starting salary increase for
newly quali昀椀ed (NQ) lawyers in nearly a decade.
Its competitors quickly followed suit, and generous
annual pay bumps for Associates have become the
norm across the US and the UK ever since.
Eight years later, starting salaries continue to climb,
with Cravath still among those leading the charge.
In November, shortly after rival Milbank raised its NQ
salaries, Cravath announced that lawyers from the
class of 2023 would now earn $225,000 a year, or a
UK sterling rate of £183,409 –$10,000 more than the
previous year.
Other major US law 昀椀rms have since con昀椀rmed
similar pay increases of their own, while Magic
Circle 昀椀rms also upped their NQ rates to £125,000
per annum last year.
We 昀椀rst commented on the ‘Cravath Effect’, as it was
then known, back in 2019 because of the impact
it was already having on salary expectations and
talent supply for in-house legal roles. This impact has
only become more profound over time.
Historically, lawyers were willing to accept reasonable
salary reductions to move in-house. They considered
this a fair compromise for a better work-life balance,
more commercial expertise, greater autonomy and
the opportunity to see projects through from start
to 昀椀nish.
But many in-house teams are unable to keep pace
with the substantial private practice salary increases
we are seeing each year, and so the pay sacri昀椀ces
that lawyers must make have become increasingly
unpalatable.
And despite widespread agreement among industry
commentators that current levels of salary growth
are unsustainable, we expect this trend to continue
affecting hiring decisions in 2024.
The rise of internal training contracts
Because fewer lawyers are making the jump to
in-house roles, a growing number of organisations
are looking at ways to reduce their reliance on the
private practice pipeline.
We are therefore seeing more companies offer
internal training contracts, and a corresponding
increase in employers’ willingness to consider
professionals who trained in-house rather than
at a law 昀椀rm. Not only do these candidates often
have good commercial understanding, but they
may also still have private practice experience
through secondments.
Offering training contracts does come with risks.
For example, it takes time for organisations to see a
return on their investment, and it is not uncommon
for employees to accept a role elsewhere once
they are fully trained.
However, controlling outside counsel costs was
cited as a high priority for 78% of in-house legal
departments in 20232, so more companies may
have to explore innovative ways to bolster their
internal headcounts over the coming year.