Allen & Overy (A&O) is freezing associate salary bands following a sluggish financial year.
This means that associates will receive a pay rise by dint of progressing to the next step of the firm’s associate lockstep, but the value of each rung will remain unchanged from this time last year.
This is the second time the magic circle firm has taken such a step. In 2009-10 the firm, in line with the market, froze its salary bands at 2008-09 levels and stopped associates from progressing to the next level, despite them gaining an extra year of post-qualification experience (PQE).
Last year it removed the restriction to allow marginal increases for 2010-11. At that point newly qualified pay rose from £60,000 to £61,000, while the one-year PQE pay band rose from £65,000 to £68,000.
The salary for a two-year PQE rose from £65,000 to £74,000, while the three-year rate was set at £85,000, up from £71,500.
After deciding to hold the bands at these levels for 2011-12, the firm said in a statement: “Trading conditions in the UK market remain flat. Clients face the same pressures we do in this market and it would be difficult to justify an increase in salary rates.
“Our associates do, however, benefit from rolling through the bands, recognising the value of the contribution they make to our business.”
The news comes shortly after Slaughter and May announced that its associate salaries would rise by an average of two per cent, following its bi-annual pay review (5 May 2011). Trainee salaries at the firm to remain unchanged too.