The last decade has been one of great change in the investment banking legal market. An increasing number of banks have come to realise that an in-house legal resource is not only a valuable strategic addition to a company, but an effective cost reduction centre, allowing for significant savings in external legal fees. This realisation has been coupled with an increase in the number of lawyers seeking to move out of private practice and into investment banking, both in legal and non-legal roles (particularly corporate finance). This has translated into a vast increase in both the number and calibre of in-house lawyers, particularly in the last four years.
This maturing of the in-house legal market has also meant that increasingly banks are having to compete with various other sectors seeking to attract high-quality lawyers. Primarily these are UK and US law firms, with the impact the latter have had on UK salaries also having filtered down to affect the in-house salary market. Just as UK firms have had to increase salaries to try and combat the influence of the US firms, so banks have had to make their packages more attractive in order to lure away well-paid UK lawyers from private practice.
These trends are reflected in the figures contained in this year's banking legal salary figures. Base salaries have risen greatly in the last year, and are generally comparable with those in top City law firms. In addition the in-house banking lawyer expects a healthy bonus in at least the 30-50% range (and often far higher).