Allen & Overy (A&O) has become the latest magic circle firm to announce associate salary hikes.
The magic circle firm has increased its associate pay by an average of 18 per cent for associates up to five years' PQE in October 2006.
After the increase, A&O’s newly qualified (NQ) pay now stands at approximately £64,900.
This is the second increase that the firm has announced in the last six months. As first reported by The Lawyer (12 October), A&O moved first to bump up pay in October by 15 per cent in a shake-up of its associate remuneration that saw each jurisdiction decide its own rewards and benefits system. The 18 per cent increase announced today (24 April) includes last year's 15 per cent jump.
The firm has not altered its bonus system, however, which was also overhauled in October. Only junior lawyers with more than two years’ post-qualification experience are eligible for a bonus, which is linked to the value of a partner point (£24,008).
Managing partner David Morley said: “Today's announcement reflects our commitment to reward associates for the key contribution they make towards the success of the firm. We have had an extremely busy year, in which everyone has made a tremendous effort, and as we approach the year end, our results look very promising."
Last week, Clifford Chance pushed up associate salary in London by 15 per cent, with NQ salaries starting at £63,500.
Meanwhile, it is understood that Linklaters increased base salaries by 16 per cent, taking NQ pay to £64,000, although the firm is yet to publicly confirm this figure.