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Wild card Weil Gotshal deals trump card on salaries
Posted 15/06/2007 by Ben Wheway
Weil Gotshal certainly doesn’t mess about, or at least not this year. Just when the drama looked like it has gone out of the current City pay round, the US-based firm announced that it is raising its pay bands by between 17% and 20%, taking its starting pay from an already competitive £75,000 to £90,000, as revealed today by legalweek.com.
It is an interesting decision in terms of what it says about the firm and where it is going in London. Weil Gotshal has seemed at a cross-roads for some time. On one level, the private equity/insolvency/structured finance axis that drives its City practice looked absolutely tailor-made to pick up much of high-profile, cutting-edge transactional work out there in Europe. The firm also injected some much-touted talent last year in the shape of a private equity team from Lovells led by the notoriously driven Marco Compagnoni. And the firm has the services of Mike Francies, regarded as one of the City’s top all-round deal lawyers.
Yet there has been persistent talk of tension and turbulence at the office and the upheaval related to the Lovells team’s arrival cost the firm some experienced associates. The firm wasn’t retaining enough talent and it knew it – hence the move on pay.
The rises also reinforce Weil Gotshal’s position as the wild card of the City legal community. On the one hand, the firm has been winning an impressive rate of quality mandates and often looks like the one US firm that could actually hurt the magic circle. By the same token, it is really not that difficult to imagine it all going pear-shaped. Such an aggressive pay deal makes the chances of achieving the former and avoiding the latter look that much higher; if only because it suggests London has a clear endorsement from the US.
It will also be interesting to see what impact the firm’s move has on the wider City market. As one of the first US firms to make a serious move into UK law, the firm has always had more impact on the local market than most of its US counterparts; there’s never been much of a branch office mentality about Weil Gotshal in London.
The pressure will be most keenly felt at mid-Atlantic counterparts such as Shearman & Sterling and White & Case, which have traditionally recruited from the same pool. Shearman in particular, which is now paying far less and has had morale problems of its own, will be watching developments warily.
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Comments
This looks like a ridiculous amount of money to pay. One wonders what extra cost the Weil lawyers have to face with such a pay rise. Is it really just to keep the best lawyers?
Anyway, it can only be good for students that are lucky enough to land those training contracts; the future is bright indeed. It is amazing the rate at which London firms are catching up with their New York counterparts. If London is indeed moving towards ovetaking Wall Street, this should show in how corporate lawyers are being paid.
What Weil has started is a welcome development.
Posted by student | 20/06/2007
I work at a Wall St firm in London and it's fair to say that the UK pay hikes have been closely watched and extensively commented on by associates here. The received view is that significant pay rises will follow at the larger US firms currrently paying full US rates, come the new year or sooner. So thank you, Magic Circle, for providing Manhattan's elite with a good reason to soften further the pain of the weak dollar.
Posted by Chad Dexter III | 20/06/2007