Allen & Overy (A&O) has made a token increase to its associate base salaries, raising them in line with the market rate set by rival Clifford Chance two weeks ago.
The magic circle firm has not publicly released the improved salaries, but it is understood that newly-qualifieds' pay now stands at £64,900, compared with Clifford Chance's salary of £63,500.
A&O's pay rise follows the headline increase it made to associate pay last October, when it spiked its base salary by 15 per cent as part of an overhaul of associate benefits and compensation. That increase took newly-qualifieds' pay to £63,250.
Although the firm said its most recent increase represents an average 18 per cent rise since October, last week's increase actually translated to growth of just 2.61 per cent.
The new base salaries top those at Clifford Chance, but bonuses at A&O are not paid out to associates with less than two years' PQE. A newly-qualified at Clifford Chance could take home £76,200 if a bonus of 20 per cent of salary is factored in.
A&O has not moved to alter its bonus system, which in October was pegged to the value of a partner point, or £24,008. Those with between two and four years' PQE qualify for up to 100 per cent of that, while those with between five and seven years' PQE could earn up to 200 per cent.
Last week's increases apply to associates with up to five years' PQE. Senior associates were given a new salary band of between £98,000 and £150,000 in last October's overhaul.