What associates earn in German patent litigation practices

In the battle for the most talented lawyers with an interest in patent litigation, the absolute top offer comes from Quinn Emanuel with a starting salary of €175,000 plus bonus. Partners in those practices not competing for the highest salaries can only shake their heads at this. But this sum is a statement. Top salary for top performance, and many working hours spent on the crème de la crème of patent litigation cases.

In Munich it has a little to do with the high cost of living but not when it comes to Mannheim. Even if Quinn Emanuel is the most prominent, many law firms in Germany have taken part in the race for the highest salaries in recent years. Intensive, decade-long research by JUVE Patent’s sister publication azur100, reflected in this article, shows a clear direction. Salaries are rising steadily, even though training programmes, work-life balance and additional benefits such as gym subscriptions have become more important in the overall package.

Pu pu platter of firms

It is not only large US law firms that are willing to pay more than €150,000 as a basic salary in the first year of employment, but also renowned national law firms such as Hengeler Müller. The market-leading patent litigation boutique Arnold Ruess in Düsseldorf, for example, also lives up to its origins as a Freshfields spin-off by offering a high basic salary. Thus, career starters seeking high salaries have a wide selection of German law firms to choose from, each with very different cultures and set-ups.

But it is not only the basic salary that is decisive when it comes to earnings. Bonuses can also make up a considerable proportion. Some of the law firms offering a basic salary of over €150,000 also advertise a significant bonus.

Many of those law firms paying a basic salary of less than €150,000 make much greater use of the bonus. The major international law firm Taylor Wessing leads the way here with a bonus of up to €50,000 in the first year of employment. This would be on top of a basic salary of €110,000 in the first and second year.

Realistic bonus expectations

But how realistic is such a bonus for associates at the start of their career? Taylor Wessing patent litigator Jan Phillip Rektorschek says, “A salary of €130,000 to €140,000 is realistic for associates in our German patent practice in their second year.” Across the German offices of Taylor Wessing, those associates that earned a bonus in their second year received an average amount of around €27,000. These figures refer to the second professional year, as the first year at Taylor Wessing usually only covers half or three quarters of a calendar year and is therefore more difficult to evaluate.

The mixed law firm Eisenführ Speiser also pays a comparatively high bonus of up to €30,000. Many others, however, pay a bonus of between €10,000 and €20,000. In awarding bonuses some law firms take into account more than simply the much-debated billables. At the Düsseldorf boutique Kather Augenstein, for example, a bonus is awarded for various achievements, such as work that improves the firm internally.

The role of billables plays a major cultural role in many law firms. Some are just as wary of billing clients high sums for associates who are in the first few years of their careers — and therefore less experienced — as they are of the pressure on young professionals to bill many hours themselves. A requirement of more than 1,600 billables is seen as unrealistic, even by many of those experts that work to this parameter.

More than billables

Even the Düsseldorf boutique Wildanger, a market leader in patent litigation, does not pay the highest starting salary. Wildanger partner Jasper Meyer zu Riemsloh says, “So far, we have never had an applicant turn us down because of salary. However, the issue is important for lateral hires.” He adds, “In the first two years, the focus is on good and comprehensive training of the associates and not on achieving the highest possible turnover.”

Although remuneration often varies more between associates after one or two years, every law firm has a finely balanced salary structure encompassing all staff, from students to partners. Entry-level salaries must fit in appropriately. Lateral entrants at associate level can jeopardise this salary structure.

Law firms have long been aware of this. But the UPC has brought another issue to the fore. Up to now, lawyers have worked with colleagues from other countries in pan-European proceedings, and each knows what the other charges. However, in UPC proceedings, associates from London to Milan now do the same work on the same pleading. Therefore, law firms not only have to deal with their different hourly rates in joint invoices, but different salaries in different countries are also likely to become an issue.

UPC challenges for salaries

So far, the differences in salaries between European countries have not played a major role, even though the UPC will of course make them more comparable in patent practices. Jan Phillip Rektorschek says of Taylor Wessing’s practice, “As we work in truly international teams on the UPC cases, we try to make sure that the rates of our associates from the European Taylor Wessing offices admitted to the UPC are balanced as far as possible.”

Up to now, associates have tended to compare themselves with their colleagues in the same city. In the long term, however, they are likely to scrutinise arguments based on the differences in costs of living, tax systems and remuneration models more closely. A topic that is complex and opaque. Even among patent attorney firms, there are many different systems for calculating remuneration.

In future articles, JUVE Patent will extend its research to include other countries, as well as patent attorneys. Some important patent law firms in Germany such as Bardehle Pagenberg and Wildanger did not provide any figures by the time this article went to press. As a result, this article cannot be considered a complete overview of the German market.