Magic Circle law firm Freshfields Bruckhaus Deringer has begun paying out special bonuses to mid-ranking lawyers working on private equity deals, as it seeks to keep hold of its staff in the face of competition from US firms.
The London-headquartered firm is reportedly paying out bonuses worth £50,000 to lawyers working on private equity deals.
The bonuses, specifically for mid-level lawyers working on private equity deals, come as a new split in law firms pay structures, which have traditionally used uniform pay grades to pay staff equally across departments and specialties.
The big bonuses have been paid out in addition to lawyers’ regular salaries and bonuses, according to The Financial Times, which reported that the bonuses may be taken back if employees leave the firm within the next year.
Freshfield’s new pay structure comes as British law firms face being overpowered by their US counterparts in the battle for legal talent.
Over the past month, lawyers salaries have hit new highs of more than $215,000 (£160,000) a year, after US firm Milbank sparked a fresh bidding war in the battle for legal talent.
In the past year, Freshfields has lost two private equity partners to Chicago law firm Kirkland & Ellis – the largest law firm by revenue in the world.
Freshfields refused to comment.