Addleshaws targets pay bunching, freezing NQ salaries at £100k

Addleshaw Goddard has opted to freeze NQ lawyer pay at £100,000, instead channeling investment into the salaries of its more experienced associates and an expanded £19 million bonus pool.

Managing partner Andrew Johnston said the decision would "unwind compression" between NQ pay and that of more senior lawyers, addressing a growing challenge across the market.

The pay bunching problem

By holding NQ salaries steady, AG has freed up space to boost pay further up the ladder while also adding £1 million to its bonus pool - now £19 million - to reward standout performers, according to The Lawyer. AG confirmed to Non-Billable that the pot applies to business services professionals as well as lawyers.

The move targets salary bunching - where rapidly rising NQ salaries narrow the gap with slower-moving mid and senior-level associate comp. That can make it harder for firms to keep more experienced associates motivated and is contributing to wider attrition issues in the sector.

The firm isn't the first to flag the issue. Announcing new NQ rates earlier in August, Shoosmiths admitted the rises have "knock-on effects" and create "understandable concerns around pay compression", noting the same dynamics are being felt across the market.

AG's approach contrasts with rivals including Pinsents and Eversheds which have pressed on with NQ pay rises this year, and the issue is prompting wider discussion across the market. Speaking on The Non-Billable Podcast recently, Simmons & Simmons senior partner Julian Taylor called the continued salary spikes at the top end of the market “crazy”, claiming they “drive clients mad”. See our City law firm salary table for the full market view.

Despite the change of tack, the firm pointed to its market-leading 88% trainee retention rate, which it said reflects its commitment to retaining junior talent even as it shifts focus towards its more senior lawyers.

What they said

Johnston said:

"After careful consideration we have decided to hold our NQ rates this year. This allows us to unwind compression between NQ pay and that of more experienced lawyers. Whilst we recognise this is a different position to the one others are taking, we believe that we are doing what is right for our people and business, and aligning with the interests of our clients.

"We continue to incentivise contributions which deliver strong outcomes for our clients. In line with firm performance, our bonus pot has grown to £19m, which means lawyers who have contributed significantly are meaningfully rewarded."