As US firms awash with cash ratchet up junior lawyer pay in the City, the profession’s most lavishly remunerated trainees can earn five times more than those who choose publicly funded work.

Last month, New York-headquartered Davis Polk & Wardwell sailed into uncharted waters. The firm confirmed that London trainees in their second year will be paid £60,000, a new record for solicitors at this stage in their careers. 

The news, following a series of generous salary announcements by US-based firms, cast a spotlight on the widening gulf between salaries at City of London-based international outfits and solicitors working in publicly funded work. 

The annual salary of a trainee at Davis Polk is now nearly five times estimated annual earnings for some the country’s lowest-paid trainees. An impact assessment on minimum salaries published by the Solicitors Regulation Authority earlier this year revealed the lowest earners were paid fractionally over £13,000. These trainees often boast similar qualifications and credentials but have opted to pursue a different area of law. 

A trainee solicitor in London specialising in criminal law, who says they are paid £20,000 a year, told the Gazette there was ‘undoubtedly a tiered system’ and that criminal law is at the bottom of the pile. ‘It’s no longer a case of asking your firm for a pay increase because when you look at the rates it’s just not possible. The profession is not sustainable or profitable,’ they said. 

Although the Law Society sets a recommended minimum (£21,561 in London and £19,122 outside) many trainees receive less. The SRA’s impact assessment showed its decision to abolish a mandatory minimum four years ago has, perhaps unsurprisingly, led to a sharp slump in pay. The bottom 2% of earners are now being paid ‘up to’ £13,104 per year – down by 24% since 2013. For the bottom 5%, the ‘before’ and ‘after’ salaries are £17,675 and £15,406. 

The figures make grim reading for anyone considering a career away from the City’s elite and their US counterparts. Almost every US firm with a London office now pays its NQs more than £100,000 (some pay more than £140,000) while the elite UK firms pay above £70,000. 

This summer saw a host of firms crank up their offerings to fresh-faced solicitors with new rates. 

Tony Williams, principal at Jomati Consultants and a former managing partner at Clifford Chance, said the profession is split into three tiers. ‘The top tier are the firms that pay for an LPC and offer a lot of money on qualification, while the second tier will pay something towards [qualification] costs and provide a decent job at the end. But there is a third tier where people can’t get funding and unfortunately go into poorly paid jobs at the end. 

‘Salaries could range from in excess of £100,000 at the top end and between £20,000 and £40,000 in the lower end.’  Williams said the disparity in pay at the opposite ends of the profession had always been apparent but never as stark as it is now. 

On minimum salaries, Williams added: ‘If the mandatory minimum salary were to be [reintroduced] you could get a situation whereby some firms would declare they are not in a position to offer a contract and there would be a further reduction in jobs. It’s a shame, but some trainees may take a view that any contract is better than no contract.’ 

A solution appears lacking. Williams has previously suggested major firms allocate 1% of their profits to funding initiatives that centre around access to justice. 

At the moment, all the signs are that the wages chasm will only widen.