Costly young lawyers not welcome in-house

By Anne Mizzi

Dramatic rises in private practice salaries, to 42,000 for newly qualified lawyers, have failed to spur similar hikes in in-house salaries as companies turn their backs on recent qualifiers in favour of more experienced lawyers.A survey by legal recruitment consultancy Michael Page Legal said: 'Many legal department heads cannot, and will not, compete with these salary rises.'The 42,000 figure - an 18% jump from six months before - was for newly qualifieds at the top-ten firms.

It fell to 37,000 for the next tier of City practices with more than 50 partners, and 34,000 for those with fewer than 50 partners.

Newly qualifieds at US firms can expect to be paid 78,000, the survey said.Paul Newton, BUPA's head of legal, told the Gazette that he was now not taking on newly qualifieds: 'The salaries being offered to recently qualified lawyers are just not sustainable.

Sooner or later, the economy is going to take a downturn, and it's not in our interests to find that staff are being overpaid because it only ends in tears.' Mr Newton said recently qualified lawyers do not represent value for money at current rates, and that he expects more companies to go for the value-for-money option and hire more experienced lawyers.Ian Thomson, head of legal at Boots and chairman of the Law Society's Commerce & Industry (C&I) group, said: 'The C&I group is keeping a careful eye on the much-publicised increases in starting salaries offered to newly qualified lawyers at City firms.

If the gap widens, it is going to be more of a challenge to attract the right people.

There are some people who are not motivated purely by money, but money is obviously a factor.' Mr Newton added: 'Companies have long memories and they realise that salaries are going to be translated into annual charge rates.

Companies will be looking for ways of avoiding having to pay for work being done by junior lawyers.

It's just crazy.'But in-house lawyers in booming sectors like banking and telecoms can now expect to earn similar sums to private practitioners plus 'significant' bonuses, according to the survey.Newly qualified in-house banking lawyers' average salary rose from 37,000 at the end of last year to 42,000 this summer - a rise of 13.5%.

Those with one to three years' post-qualification experience rose only 3.8% and after three years remained static at 70,000, and 80,000 at five to ten years.