Freshfields matches Cravath pay rise for US-based associates

Freshfields Bruckhaus Deringer has boosted the salaries of its US associates to match the increase announced by Cravath Swaine & Moore earlier this week.

A spokesperson for the firm confirmed that first-year associates in Freshfields’ US offices will now receive $180,000 (£124,000) a year, matching the increase by Cravath.

Freshfields has set out an increased pay scale that culminates in an annual pay cheque of $325,000 (£225,000) for associates that started in 2007 and earlier.

Adam Siegel, Freshfields US managing partner, said the changes would “strengthen Freshfields’ offer” to associates and “support its long-term growth strategy in the US”.

He added: “Our recruitment and retention of the best law students and associates is critical to our continued success.”

Some of the firm’s magic circle peers may yet follow suit. Allen & Overy is considering its US pay rate in light of Cravath’s hike, and Linklaters is yet to reach a decision on what, if anything, it will do to respond.

The Cravath rise, which represents a $20,000 (£14,000) hike for first years (the equivalent of newly qualified (NQ) lawyers in the UK), will see pay for lawyers in their eighth year climb to $315,000 (£216,000) – up $35,000 (£25,000) on current levels at the firm.

The move has been followed this week by a host of US firms, including Milbank, Weil Gotshal & Manges, Cahill Gordon & Reindel and Paul Weiss Rifkind Wharton & Garrison.

Legal Week‘s US sister title Law.com reported on Wednesday that associates at Cooley, Debevoise & Plimpton, Simpson Thacher & Bartlett, and Skadden Arps Slate Meagher & Flom, will also receive pay increases on the scale adopted by Cravath.

Kirkland & Ellis is also matching Cravath’s new pay scale in all of its offices up to those that qualified in 2010, who will receive $280,000.

Milbank, Paul Weiss, Cravath, Simpson Thacher and Cahill will all extend their New York rates to their new London offices as well.

It is not yet clear if the new pay rates at Weil and Skadden will also be paid to associates in London.

Debevoise’s new rates will apply to lawyers on the US pay scale in all its offices, some of which are in London.

Cooley, meanwhile, is reviewing its London rates.

Last month, Freshfields announced a new pay scale for UK-based junior lawyers, which increased salaries for NQ lawyers to between £85,000 and £97,500.

Those with two and three years’ post-qualifying experience (PQE) have seen their salaries rise to between £105,000 and £115,000, up from between £87,500 to £100,000.

However, those in the NQ and one-year PQE band are not eligible for a bonus, which they were eligible for last year, while those in the next band up can receive a bonus of up to 20% of their salary.

Freshfields’ US pay scale

Class of 2016 – $180,000 (£124,420)

Class of 2015 – $180,000 (£124,420)

Class of 2014 – $190,000 (£131,330)

Class of 2013 – $210,000 (£145,150)

Class of 2012 – $235,000 (£162,430)

Class of 2011 – $260,000 (£179,710)

Class of 2010 – $280,000 (£193,540)

Class of 2009 – $300,000 (£207,360)

Class of 2008 – $315,000 (£217,730)

Class of 2007 and more senior – $325,000 (£225,000)