Allen & Overy (A&O) and Clifford Chance (CC) have raised their US associate salaries to keep pace with the Manhattan pay war, with magic circle rivals Freshfields Bruckhaus Deringer and Linklaters poised to follow.
A&O and CC have announced they are raising salaries for first-year lawyers to the new benchmark of $160,000 (£81,000) and lifting rates across the board, with senior associates in line to pocket around $280,000 (£142,000).
CC said that the firm had no current plans to match the rises in the UK, but with US firms including Simpson Thacher & Bartlett and Cleary Gottlieb Steen & Hamilton having already handed London associates the same deal as their US counterparts, the pressure will be on City firms to react.
CC¹s newly-qualified lawyers in the UK receive £55,000, meaning their US counterparts now receive nearly 50% more in the fixed part of their remuneration package.
A&O¹s newly-qualified lawyers in the UK currently take home the largest fixed salary of any City firm, bagging £63,000, but this still falls some £18,000 short of their US equivalents. Freshfields Bruckhaus Deringer and Linklaters were both reviewing their rates as Legal Week went to press.
The latest round of pay-hikes follow Simpson Thacher raising its associate salaries to $160,000 last month (22 January) .
Other firms to have followed Simpson Thacher¹s lead include Sullivan & Cromwell, Cadwalader Wickersham & Taft, Fried Frank Harris Shriver & Jacobson and Paul Weiss Rifkind Wharton & Garrison ‹ firms which traditionally match New York salaries in London.
The rises come only 11 months after the last round of significant US pay hikes, which saw salaries rocket $20,000 (£10,100) to reach the $145,000 (£73,400) benchmark.
