You need to enable JavaScript in order to use the AI chatbot tool powered by ChatBot
Marks Sattin logo

How Private Practice salary surges impact the In-House legal market

Legal
Elliott Kaye our consultant managing the role
Author: Elliott Kaye

Here at Marks Sattin Legal we like to do things a little different. Yes, we are Legal Recruiters, but we see ourselves also as consultants with the ability to offer market leading insights and trends. This is how MS Legal News was born, we wanted to create a platform to provide all our clients and candidates with market trends and insights we have seen, and hopefully create a conversation!

snippet image

The rise in Private Practice (PP) salaries and the effect it has had on the In-House (IH) industry.  

So, where to start? Firstly, it makes sense to go back to where the spike really started.  Legal salaries have really started seeing increase since 2016. This is largely due to several factors including the growth of US firms in London, inflation and increased demand for legal services. The trend continued in 2023 with the 20% increase of newly qualified lawyers (NQ), however this was taken to the next level recently, with some firms now offering NQ’s an eye watering salary of £180,000, which is absolute madness! (Hogan Lovells have just also increased their NQ pay to £140,000!) Whilst Lawyers in PP are popping open a bottle of champagne, IH Lawyers will be feeling the squeeze.

What’s been driving this salary surge?

I’m sure we are all aware of the ever-lasting pay-fight UK firms have with US firms, with US firms generally dominating the fight with humungous compensation packages. Magic Circle et al have been trying their best to keep up, however the reality truly is stark and nearby impossible to keep pace! US firms are winning this race, and there’s little UK firms can do to stay competitive.

As a result of the struggle, we have seen a drastic increase in salaries across the board with newly qualified lawyers at the top firms now taking home salaries that seasoned partners of yesteryear could have only dreamed of! It is very much no longer about the prestige of firm being the main pull for firms. Firms are now acting in survival mode and using salary hikes as a way to attract and retain talent within this increasingly competitive market. Let me know who you think does this the best!

So, how has the PP salary hikes affected IH salaries? Well, whilst law firms are effectively throwing money at associates, in house legal teams are facing an increasingly worrying dilemma; do they roll the dice or stick to their guns?

As we all know, traditionally lawyers move in-house for a better work-life balance, even at the expense of a salary drop. However, with the rise in private practice salaries, in-house roles are struggling to seem as attractive (even with the increase in billable hours targets!)."

Every industry will understandably be feeling the pressure due to the increases. However, it is not all doom and gloom! General Counsel’s are seeing some pay bumps to stay somewhat competitive (it may not feel like it!), although I would say that mid/senior level Legal Counsel’s will be feeling this the most. They will be questioning whether they should have left PP, but also whether they should go back for a few years for that salary bump. It could be compared to a Footballer going to Saudi for a few years! The biggest question they will be asking themselves is whether the trade-off is worth it. I firmly believe that it is still. I understand the pull of the large salary, however what is the point of this if you don’t have the time to spend it?! Moving IH offers you the opportunity to actually see the impact that your work can have on a business, which is second to none! Whilst I must stress, IH is no holiday, it does give you your life back!

Predictions for the rest of 2025 due to the salary hikes

Firstly, we can expect companies to increase salaries for legal counsel roles to stay as competitive as they can. Whilst they won’t match PP salaries, they will be offering better benefits and flexibility. Secondly, with law firms increasing billable hour targets and more time in the office, IH companies offering Hybrid working will be a key selling point for lawyers to move IH. Thirdly, as I alluded to above, companies will start to be more creative with their compensation packages, offering more equity-based incentives, performance bonuses, and additional benefits to become more enticing. Finally, I predict that there will be a tug of war going on between PP & IH for talent. PP firms will continue poaching IH talent through massive pay packets, however companies will fight back with retention strategies focused on an impressive culture, flexibility, respectable package, and impressive benefits scheme.

One thing is for sure, 2025 and beyond is shaping up to be a fascinating year for legal salaries and companies must become a little more creative to keep their top talent motivated and engaged!

I’d love to hear your thoughts on this and discuss this topic in more detail. Feel free to get in touch!

19/05/25

Popular Searches

Quick links