Pay for in-house lawyers lagging behind inflation

IN-HOUSE lawyers are facing a real-terms cut in salary for the second year running, new research has revealed this morning, with average pay increases across the sector failing to match the rate of inflation in the UK.

In-house heads of legal have seen their salaries rise by an average of 2.5 per cent over the last year, according to a survey by Incomes Data Services (IDS) – well behind the current rate of retail price index inflation, last measured at 5.2 per cent.

Though the outlook is better than at the beginning of last year, when in-house pay rose just 1.5 per cent, the average basic compensation of £132,310 still represents a decline in income in real terms.

Better news for in-house legal teams came in the form of fewer pay freezes, with just 21 per cent of employers curbing pay increases compared to 36 per cent last year.

“Despite the modest headline improvements in pay awards, in-house lawyers are experiencing a squeeze in real earnings,” said Nasreen Rahman, principal researcher at IDS.

The survey also found a mixed outlook on bonuses, with 39.5 per cent of heads of legal saying their bonuses this year were higher than last year, while 35.2 per cent said they were lower.