Addleshaws' 21% pay hike shocks national market

Newly-qualified (NQ) London salary rates at the top 15 UK firm have soared to £64,000, up from last year's £53,000, the most aggressive pay rise yet from a national player and one that takes its salary up to top City market rates.

The move, announced internally last week, also sees salaries across the firm's Manchester and Leeds offices jump 14% from £35,000 last year to hit the £40,000 benchmark, taking Addleshaws well ahead of its regional competition.

Addleshaws managing partner Mark Jones told Legal Week: "On the one hand, we have got our successful City office and, on the other, we have got Leeds and Manchester, which operate in a totally different environment and we need to account for that."

The scale of the rises will send a jolt through the UK's regional legal market as firms outside London wrestle with the prospect of losing the best young lawyers to big-spending City counterparts.

One senior partner in Leeds said: "People are being cagey as they try to see where the market is settling outside London. However, this can quickly become a problem; if you radically jack up your NQ rates it will impact on all the bands above it and you end up paying an awful lot more for all your lawyers."

Pinsent Masons is also forecasting a substantial rise in its pay rates, which currently see newly-qualified lawyers take home £53,000 in London, more than 50% ahead of their colleagues in the firm's regional offices, who earn starting salaries of £35,000. The firm will formally announce its 2007-08 salary bands on 1 July. Eversheds has also delayed an announcement until the end of June, although the top 10 UK giant is expected to plump for NQ salaries at the regional average of £38,000.

The issue has generated intense debate on legalweek.com with many assistants outside of London bitterly criticising national firms for attempting to hold down pay.

One junior lawyer in Leeds commented: "In the regions, our hours are increasingly being compared to the City firms, yet it looks like our pay will be held tight to finance bigger salaries at the City offices."

What effect will Addleshaws' move have on the market? Have your say with the Legal Week Wiki salary special.