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A&O Shearman has become the latest elite law firm to increase pay for newly qualified lawyers in London to £150,000, matching moves made by its peers in recent weeks.
The firm, a merger of UK “magic circle” outfit Allen & Overy and US-founded Shearman & Sterling that went live this month, has boosted pay for its most junior lawyers by 20 per cent, it said on Friday. The firm has also increased pay for trainees.
The rise in salaries follows a flurry of pay increases by the firm’s main competitors in recent weeks, as a renewed war for junior legal talent in the City of London gets firmly under way. “Magic circle” peers Linklaters, Freshfields Bruckhaus Deringer and Clifford Chance all increased pay for newly qualified lawyers to £150,000 this month.
The pay increases at A&O Shearman are effective from May 1. Salaries for first- and second-year trainees have increased by over 10 per cent to £56,000 and £61,000, in line with peers.
The rush to bolster pay for the most junior ranks comes amid intensifying pressure on UK-founded firms from their deep-pocketed US rivals, which have a growing presence in the City. US law firm Quinn Emanuel Urquhart & Sullivan increased base salaries for its most junior lawyers in London to £180,000 this month, while firms such as Latham & Watkins pay newly qualified lawyers $225,000.
The “magic circle” group of law firms have increased pay for their junior ranks by as much as 50 per cent in the past five years.
“Our compensation structure gives us flexibility to reward expertise, performance and wider contribution and is designed to be highly competitive to reflect the markets in which we operate,” Denise Gibson, A&O Shearman’s London managing partner, said. “Trainees and NQs are a key part of the firm’s future.”
The decision leaves Slaughter and May as the only “magic circle” law firm to have not yet increased pay for junior lawyers from the previous level of £125,000. The firm said that it looks at salaries biannually, with the next review set for November.
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