In a move that surpasses their London competitors such as Slaughter and May and Macfarlanes, Baker McKenzie has raised the salaries for its newly qualified (NQ) associates in London to £118k.
This increase represents a seven percent rise from the previous amount of £110k and is accompanied by a discretionary bonus.
However, when compared to the offers made by top US firms to London NQs, the new salaries pale in comparison.
The US firms benefit from their presence in the lucrative US market, with firms like Davis Polk & Wardwell, Weil Gotshal & Manges, and Skadden Arps Slate Meagher & Flom recently raising their rates to £165k.
This salary war for junior talent began during the pandemic and shows no signs of abating, despite the worsening economic conditions and reports of redundancies at several US firms including Cooley, Goodwin Procter, and Orrick.
The salary developments in the UK indicate that many leading firms are weathering the stagnant economy relatively well, alleviating concerns about widespread job losses.
This salary increase positions Baker McKenzie ahead of London rivals Macfarlanes and Magic Circle firm Slaughter and May, both of which raised their pay by 7% to £115k. It also places them ahead of DLA Piper and BCLP, which increased their London NQ pay from £95k to £100k and £105k, respectively.
But Baker McKenzie still trails behind Hogan Lovells, which raised NQ pay by 12% from £107.5k to £120k in May, as well as the rest of the Magic Circle firms, all of which offer £125k to their NQs.
Allen & Overy and Linklaters raised their pay by 16 percent from £107,500 earlier this year after failing to match Clifford Chance and Freshfields Bruckhaus Deringer’s rates last year due to challenging market conditions.
Baker McKenzie confirmed that trainee salaries would remain unchanged at £50,000 for the first years and £55,000 for the second years.