Legal Practice Areas: Which Have the Highest Average Earning Potential?

With reports of record-high legal salaries on offer, even the most loyal lawyers could be tempted away by a better deal. But do you know where to look and which companies are offering the best benefits packages?

It is essential that any senior legal practitioner considers the totality of the package on offer, as often flexibility and soft benefits are sacrificed for a high salary. So, if well-being is a priority for you, make sure that you fully interrogate the package on offer before making the leap.

Factors that influence earning potential

There are many factors that influence earning potential in every practice area. The first is location. Law firms that are located in areas with strong competition, such as the City of London, typically attract higher salaries than those in more rural or remote areas where fewer firms are competing for talent.

Second, the size of the firm matters. Smaller firms usually have tighter budgets than their larger competitors and therefore offer lower salaries. This is because large firms often have a more diverse portfolio and therefore a greater risk buffer against social, economic and environmental challenges which may affect one or more areas of the business.

Cross-border firms, such as US-headquartered firms located on British soil often pay more than UK-based firms, predominantly because their staff are more accountable than those employed by UK firms. Likewise, Magic Circle firms have very high expectations of their staff and are willing to offer impressive salaries to attract and retain the most talented legal professionals.

Finally, and unsurprisingly, experience also counts, with highly qualified lawyers with relevant sector expertise attracting premium salaries across all practice areas.

Highest earning potential legal practice areas

A recent Audience Insight Report by Totally Legal identified that the sectors offering the greatest earning potential in the UK this year are IT and telecommunications, energy and environmental, regulatory and compliance, banking, corporate finance, commercial, entertainment, and intellectual property.

Commercial, corporate and EU law have always been thriving areas of law, but what is particularly interesting about this new report is the extent to which digital innovations and regulatory complexity have increased activity in previously quieter sectors, accompanied by impressive pay uplifts of up to 18%.

The drop in salary expectations for lawyers operating in the media and entertainment industry has largely been attributed to changes in consumer behaviour, prompted by the ongoing cost-of-living crisis. Other sectors which have seen significant salary drop-offs include wills and probate, criminal law and corporate law.

Balancing salary and overall package offerings

It is vital that you consider not only salary but also work-life balance, in order to avoid stress and burnout whilst contributing to a practice area that you are passionate about. A YouGov survey conducted earlier this year identified that as many as 90% of lawyers have experienced stress and burnout at work [2], and with a growing recognition of the need to prioritise wellbeing, it is essential that jobseekers consider the totality of the offering when seeking new opportunities.

Many focus on the ability to work flexibly or remotely, thus enhancing their work-life balance. But other important considerations include seeking opportunities for career progression such as the ability to progress within the organisation's hierarchy and funded professional training and job stability. Firms with a diverse portfolio often offer candidates greater long-term job security due to their ability to balance deficits in one area against profits in another.

In short, if you are interested in chasing the highest possible salary, the best opportunities lie within US-based and Magic Circle firms that are located in London and specialising in IT and telecoms. If you want a high salary with a better quality of life, you will need to interrogate the job offering in greater depth.

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