A group of US firms are gearing up for a round of London associate salary rises with McDermott Will & Emery and Dechert the first to increase pay rates to keep up with City competition.
McDermott has brought forward its rises, which were scheduled to take effect from 1 January, with newly-qualified (NQ) lawyer salaries jumping by 7% from £70,000 to £75,000.
The rates, which came into effect on 1 September instead of January next year, have risen by a similar amount for all levels of junior lawyers, with one-year qualified associates now taking home £82,500.
Meanwhile, Dechert has this month increased its NQ rates by around 10% to £63,000-£72,500, from its previous range of £56,000-£66,000. One-year post-qualified experience (PQE) lawyers will now earn a maximum of £80,000, two-year PQEs will earn up to £90,000 and three-year PQEs up to £100,000.
The move is likely to be followed by Kirkpatrick & Lockhart Preston Gates Ellis, which is currently reviewing its rates. Jones Day is also reviewing its London rates, to take effect from January.
McDermott partners said the decision was taken in order to bring them in line with other mid-Atlantic paying US firms, which earlier this year upped NQ rates to around £75,000.
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Talkback: Will the pay war never stop? Post your comments here
New York's elite are expected to increase associate salaries by 10% or more from 1 January. We've already had a sweep in my department!
Same expectations at my shop. People are still working very hard and have noticed the significant increases in basic pay and bonuses at UK firms this year.
I'm at a Wall Street firm in London and think the above comments are reasonable although at the low end of expectations. Mid-Atlantic firms like Weils and Paul Hastings are now paying significantly more than a year ago, closing the gap to firms paying full NY rates. That gap is important and represents a risk premium and hours premium that associates expect when joining. We'll see some associate mobility if the difference in compensation isn't reasserted. I am confident that it will be.
I agree that mid-atlantic firms have closed the gap to their NY rivals but the MWE report is misleading. Salaries did go up on 1 September but this was a belated response to market movement seen earlier in the year at other firms (which raised bands by considerably more than MWE). This has not been MWE stealing a march on salary rises for 2008.
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