Ever heard the word Magic Circle firms and think what does the term mean? Do they perform magic? What are they all about? Well, this post is going to go through what a magic circle firm is, while comparing it to another term, US law firms. This post will be useful for students and graduates in their early career seeking whether to apply to Magic Circle or US law firms. Experienced professionals can also benefit from this post.
Magic Circle Law Firms
Magic Circle law firms is an informal name used to describe the five most prestigious London-based multinational law firms – these firms generally outperform the rest of the London law firms in profitability. The term can also be used to describe the most prestigious barristers’ chambers in London. For the purposes of this post, we will be limiting our exploration of this term to law firms (solicitors). All Magic Circle Law firms specialize in corporate law and include Allen & Overy, Clifford Chance, Freshfields Bruckhaus Deringer, Linklaters, and Slaughter and May.
The term originated in the 1990s and was coined by legal reporters in the wake of the break-up of its predecessor, the Club of Nine, to describe the leading law firms in the City. The club of nine was a group of law firms that is comprised of Allen & Overy, Clifford Chance, Freshfields Bruckhaus Deringer, Herbert Smith Freehills, Linklaters, Hogan Lovells, Norton Rose Fulbright, Slaughter and May and Stephenson Harwood.
US Law Firms
As the name implies, this term, on the one hand, simply means law firms established in the U.S. that provide legal services for their clients within the country or internationally. However, this blog is concerned about the other definition of this term.
US law firms are those US law firms who have decided to abandon their US-only strategies, and have decided to establish themselves in the European Legal marketplace – that is London. Some of the US firms that have established themselves in the UK include McDermott, Kirkland & Ellis, Latham & Watkins, Baker Mckenzie and DLA Piper.
Now that we have understood the definitions of the above-mentioned terms, we’ll compare & contrast a few salient points between both categories of firms. When deciding whether to go to a Magic Circle or US firm, there are factors that you may consider deal-breakers, such as the pay, availability of secondments, availability of international opportunities, sponsorship of the LPC/GDL or visa sponsorship. For us, we will be focusing on what we consider the most important: average pay, work and culture – trainee life at Magic Circle and US law firms.
Average Salary of Magic Circle Law Firms & US Law Firms
The highest paying Magic Circle firm, Clifford Chance pays its first and second-year trainees, and newly qualified lawyers £44,800 and £50,500 and £100,000 (including bonus) respectively. The other magic circle firms pay something similar, with first-year and second-year trainees getting £44,000 and £49,000 at Allen & Overy; £43,000 and £48,000 at Freshfields; £42,000, and 49,000 at Linklaters, and £43,000 and £48,000 at Slaughter and May.
On the other hand, US law firms are known to pay their first trainee solicitors eye-watering sums; Kirkland & Ellis and White Case pay their first-year trainees £50,000, and £55,000 when they get to their second year.
As of January 2022, Milbank said it would start paying their newly qualified lawyers an eye-watering £160,000. Kirkland pays theirs £150,000; Latham & Watkins pays £137,000 while White & Case pays £130,000. So, when the remuneration package is a major factor, you know the firms you should look at.
There was once a time, whenever you said US law firms, the first thing that would come to mind would be working some hideous hours. But how does it compare with Magic Circle firms post-COVID? To arrive at this, we turn to a recent survey carried out by Legal Cheek. Legal Cheek’s Trainee and Junior Lawyer Survey 2021-2022 provided an insight into the average start times and finish times for trainees and junior associates across 100 law firms – the US law firms and Magic Circle firms’ times were also included. The top 8 law firms with the worst finish times happen to all be US law firms. At Kirkland, the average start and finish times were 9:14 am and 11:28 pm respectively; Ropes & Gray had 9:20 am and 10:51 pm; Weil Gotshal & Manges came in at 9:46 am and 10:17 pm; Latham & Watkins had 9:16 am and 9:48 pm; Goodwin Procter was 9:38 am and 9:45 pm; White & Case – 9:01 am and 9:36 pm; Cleary Gottlieb Steen & Hamilton had 9:29 am and 9:16 pm; Paul Hastings had 9:29 am and 9:13 pm. While this may seem atrocious, their Magic Circle Counterparts were not very different. Clifford Chance’s start and finish times were pegged at 9:06 am and 9:09 pm; Linklaters fared slightly better at 9:01 am and 9:09 pm; Freshfields Bruckhaus Deringer had 9:09 am and 9:01 pm; Allen & Overy came in at 9:04 am and left at 8:55 pm, and Slaughter and May had a 9:12 am start and 8:16 pm finish.
From this data, we can safely arrive at the conclusion that hours at Magic Circle firms can be equal to hours at US firms, especially if the trainee/associate is placed in a busy team. What this means is that there is no longer a discernible basis for saying that, because of the long hours at US law firms, you are better off at Magic Circle firms. Yes, junior employee’s hours will probably be longer at a large US firm, but not by much.
Culture – Trainee Life
Just as every country’s culture is different, even though they might be neighbours, it would be a crime to attach one culture to any of the categories of firms we are discussing simply because they share a commonality of ascribing to the same category. Thus we will talk about trainee life and the development of trainees. New recruits at US firms may find themselves more exposed to key workstreams and responsibilities from the onset of their careers than their UK counterparts. At most US law firms, the mantra is ‘you learn on the job’. It’s not unheard of for excellent new qualified associates at US firms to be allocated the task of drafting the first version of main transaction documents and leading negotiations with the opposing lawyers. If the candidate is in a team with supportive partners and senior associates, this type of early responsibility can be invaluable and a catalyst for progressing their career.
Due to the smaller teams in US law firms, there are fewer Associates to compete against for access to first-rate quality work and if the associate is a confident self-starter who is not afraid of early responsibility, then this can be a major benefit of moving to a US firm over a Magic Circle firm.
Conversely, Magic Circle firms are ahead of most of their US counterparts when it comes to the training and development of their trainees and newly qualified lawyers since they have been investing in this aspect of associate development for decades. Considering that many US firms have been in London for a relatively brief period, with them reasonably focusing on fee earning and building a practice, it’s no surprise that this is the case. It does, however, appear that this is gradually changing with US firms taking initiatives to deviate from the ‘learn on the job model’ to providing clear training and development infrastructure that will bridge the gap to Magic Circle firms. For example, it has been reported that Associates at Latham & Watkins can sit on decision-making committees, which include the training and development committee which is fundamental in harnessing their management skills as they progress up the associate ladder towards partnership. Notwithstanding this development, candidates are more likely to get a structured development at Magic Circle firms than their US counterparts.
So there we have it, a brief overview of the benefits and drawbacks of going to a Magic Circle firm or a US law firm. If you have read this blog, then chances are you are researching which kind of firm would suit your palate. It’s our hope that this blog has been of some help to you.
Charles is a writer, practising lawyer and personal trainer who loves learning and developing himself. He graduated from Middlesex University, London with eight first-class grades in the second and third years of his law degree, and received a postgraduate offer from Cambridge University. He loves strength training, boxing and encouraging people to succeed in their pursuits (legal ones)
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