Four leading London law firms, including Allen & Overy, have raised their newly qualified (NQ) lawyer salaries to match that of their Magic Circle rivals, Clifford Chance, Freshfields, and Linklaters.
The London pay wars have seen significant pay rises last year, as we reported last year with Herbert Smith boosting its junior lawyer rates.
As of 1 May, Allen & Overy increased NQ pay by 16 percent to £125,000, which is the same level as the other Magic Circle firms. This follows a freeze on pay increases for juniors due to economic difficulties the previous year.
The US-based London firms like Akin Gump have previously boosted their rates with exchange rate benefits giving some major pay hikes to their NQ salaries. The US firms continue to match salaries based on the famed ‘Cravath scale’ rate.
Meanwhile, Slaughter and May remain the only Magic Circle member with a lower NQ salary at £115,000. Allen & Overy offers approximately 90 training contracts annually and pays trainees £50,000 in the first year, which rises to £55,000 in the second year.
Linklaters offers 100 training contracts annually and pays trainees £50,000 in the first year, with a rise to £55,000 in the second year.
The base rate for Linklaters is now the same as that of fellow Magic Circle firms, with bonuses taking their total NQ earnings to an even higher sum. In its latest financial results, Linklaters recorded revenues of £1.78 billion and a 5 percent increase in profit per equity partner (PEP) to £1.87 million.
Clifford Chance is the largest training contract provider in London, offering 110 places, with Linklaters coming in second place.
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