In a move reflective of a buoyant global legal market, highlighting an increased demand for quality legal talent, Cravath, Swaine & Moore has lifted associate pay for the first time in nearly a decade, increasing first-year associate pay to $180,000. This move triggered similar increases amongst Wall Street rivals, with Milbank, Tweed, Hadley & McCloy LLP and Paul, Weiss, Rifkind, Wharton & Garrison LLP announcing that they too would be matching this starting salary for their associates. Cahill Gordon & Reindel LLP are expected to follow suit.
Effective from 1 July, a first-year associate at Cravath will now take home $180,000 annually, a raise of $20,000 to their pay packets, which has been static since 2007. An associate with 8PQE can now expect an annual salary of $315,000, an increase of $35,000.
In December, US firm Vinson & Elkins announced that it would be increasing the starting salary for its London newly-qualified solicitors to £100,000. Associates with 1PQE received a 22% pay increase, bringing their base salary to £110,000, while associates with 2PQE received a 20% pay increase, bringing their base salary to £120,000.
These pay increases meant Vinson & Elkins joined the ranks of a growing band of US firms in London, who pay their newly-qualified associates £100,000 or more. This group includes Davis Polk, Weil Gotshal, Akin Gump, Latham & Watkins and Sullivan & Cromwell’s.
The legal talent squeeze continues to put increased pressure on leading London City firms to keep pace with their US rivals.
After several years of trailing its Magic Circle rivals, earlier this year Allen & Overy announced pay increases for its associates of up to 25%, positioning its newly-qualified associates among the best remunerated in the City, with a starting salary of £78,500.
Freshfields Bruckhaus Deringer, Clifford Chance, Linklaters and Slaughter and May have all recently announced pay increases for their newly-qualified associates.
Freshfields and Clifford Chance have increased the starting salary for their newly-qualified associates to £85,000, a rise of £17,500 and £15,000 respectively.
Linklaters recently announced that their newly-qualified associates could expect a salary of between £81,000 to £91,000, including bonus, for high performers. Associates with 1PQE can expect to earn £90,000 to £100,000, £100,000 to £119,000 for an associate with 2PQE and £111,000 to £130,000 for an associate with 3PQE.
In what could be described as a relatively underwhelming reaction to rival firm pay increases, Slaughter and May increased salaries for its newly-qualified associates from £70,000 to £71,500, a rise of just 2.1%. Associates with 1PQE will see their salaries go up from £75,500 to £79,000.
Aperture Partners is working with a number of leading US and City law firms in securing high quality legal talent across all departments and locations.