July 14, 2024
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Low pay for UK financial crime prosecutors hits efforts to hire top talent

Low pay for UK financial crime prosecutors hits efforts to hire top talent

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Lawyers at the UK’s main financial crime prosecutors earn increasingly less than their peers in private practice, according to an analysis of pay by the Financial Times, hitting efforts to recruit talent and tackle rising economic crime.

The average partner at top criminal London law firm Kingsley Napley earned about £450,000 last year, according to people with knowledge of the firm’s remuneration, more than five times the maximum £79,315 salary for a case controller at the Serious Fraud Office. Partners at larger firms such as UK “magic circle” outfit Linklaters, which also has a business crime practice, took home an average of £1.79mn in 2023.

The much lower pay at UK agencies including the SFO and Financial Conduct Authority, which are responsible for prosecuting white collar crimes, including bribery and insider trading, is one reason the bodies struggle to recruit more people from the private sector.

Both agencies have come under pressure over their enforcement efforts in recent years, with the SFO closing long-running investigations into miners Eurasian Natural Resources Corporation and Rio Tinto last year, while the FCA secured its first insider trading convictions this year since 2019.

“Almost everybody considering a move into the public sector would take a pay cut,” said Nick Vamos, a partner at Peters & Peters and former head of extradition at the Crown Prosecution Service for England and Wales. “That might be worth it if you could in a few years leverage it into a really good job back in private practice. In the UK you are taking a risk that this will be the case.”

While a small number of senior lawyers from the SFO and FCA have landed high-paying jobs as partners at City law firms in recent years, it is less common at the more junior level.

Pay at the FCA, which is funded by the firms it regulates rather than the public purse, is slightly better than the SFO, with the most experienced lawyers at the agency earning as much as £144,000, according to the most recent information available. The Crown Prosecution Service pays its London lawyers between £42,650 and £122,550.

The gap between public and private sector pay for lawyers has been highlighted recently as a number of top City commercial firms have raised starting salaries for newly qualified lawyers (NQs) to £150,000 or more. Kingsley Napley pays NQs at least £70,000.

The FT used data provided by the agencies, freedom of information requests and public sources to collate the remuneration details.

The dynamic is in contrast to the US system where young lawyers cut their teeth at the Department of Justice or similar before cashing in their experience at a top-flight law firm. Senior US partners also often return to the agencies to take up high profile roles due to the prestige linked to such positions.

While remuneration for public prosecutors in the US is also far below the private sector, a top lawyer at the DOJ can still earn almost twice the salary of the top pay band at the SFO at $191,800 (£151,000), and the power and future earning potential can make up for the temporary cut.

Roger Burlingame, a white collar crime partner at Dechert in London, spent more than nine years at the DOJ between law firms prosecuting high profile cases involving targets such as the mafia. Young associates at top law firms compete to land such jobs, he said.

“There’s an old saying that the two best law firms in New York are the EDNY and SDNY (Eastern District of New York and Southern District of New York),” said Burlingame. “Young lawyers at top firms jump at the chance because they want to do the work, but also because it doesn’t come with a lifetime vow of poverty — they’re well aware the senior ranks of top US firms are littered with former federal prosecutors.”

UK SFO director Nick Ephgrave has acknowledged the problem. At his first speech since taking up the helm at the agency, he said he wanted the prosecutor to do more to attract lawyers from private practice, even if they only spend a few years with the agency.

“We do struggle sometimes to recruit the right kind of people into our organisation . . . and part of that is because we simply can’t command the kind of salaries that people can earn elsewhere,” Ephgrave said at the Royal United Services Institute think-tank in Whitehall in February. “We have to make sure it’s seen as a career-enhancing move to come to the SFO.”

The SFO said it was hiring from the private sector and the agency had increased its permanent staff by almost 10 per cent to 518 as of April.

Miranda Ching, who was a senior associate at a criminal law boutique before moving to the SFO in 2019, said she did see the value in the switch.

“As consolation for less pay, the SFO provides opportunities for ambitious lawyers that cannot be replicated within the private sector,” said Ching, who is now at Kobre & Kim in London. “One of my earliest experiences as a case controller was to take hold of the ‘Silver Command’ in an arrest operation. These are the types of invaluable skills . . . that set prosecutors apart from the pack should they ever decide to return to private practice.”

The CPS said it attracted “top talent” from the private sector using national recruitment campaigns and works closely with external lawyers.

The FCA and HM Treasury declined to comment. Kingsley Napley said it would publish its latest partner remuneration in July.

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