The firm was the first to freeze its salaries, effectively reversing its salary bands in February last year and dropping newly qualified (NQ) salaries from £66,000 to £59,000 (9 February 2009).
The firm took the decision to lift the freeze following a partnership committee meeting last week. It means that from May associates will now move through the salary bands as before, but will not make up the difference by skipping a band.
That said, pay bands remain frozen at last year’s levels with associates receiving a salary rise by progressing to the next level on the associate lockstep. NQ pay will stay at £59,000 with a one-year PQE lawyer taking home £66,000.
In a statement the firm said: “While the outlook globally is still uncertain, our people have worked very hard to help our clients and the firm through the challenges of the last year or so, and we’re grateful for the contribution everyone has made.
“We don’t yet know what the next financial year will bring as the outlook remains uncertain for many of our clients and, as a consequence, for the firm.
“Globally, economies are likely to recover at different rates and opinion is divided about the possibility of a ’double dip’ and a possible return to recession for some.”
Earlier this year, Latham & Watkins became the first US firm to unfreeze its salaries (5 January 2010).