Magic circle firm Freshfields Bruckhaus Deringer is reversing its associate salary bands with all associates set to receive the same level of pay from May, despite gaining a year in post qualification experience.
As a result of the changes, the salary paid to newly-qualified (NQ) solicitors will drop from £66,000 to £59,000. Associates with one year of experience will stay on their NQ salary of £66,000 while the pay band for those with two years PQE will be £73,000 and for three years PQE will be £86,000.
The salary for first year trainees will remain unchanged at £39,000, while second year trainees will continue to receive £44,000.
London managing partner Tim Jones said the decision was taken in response to challenging market conditions.
He added: “This is an appropriate and proportionate response to the world we now find ourselves in. While the firm continues to maintain a strong position in the marketplace we need to control costs, continue to focus on the needs of clients and to deliver the highest level of service.
“We believe these measures will put us in a strong position to achieve these aims.”
Jones said the firm will be paying bonuses in June as normal with the total payable to individuals to be decided near the end of the current financial year.
That said, Jones added that the total bonus pool would be lower than last year’s. At the end of the 2007-08 financial year associates with one and two years PQE were eligible for a maximum payout of £20,000 while those on three years could gain a maximum bonus of £35,000.
Last year Freshfields increased associate salaries by an average of 2 per cent, having raised them by an average of 19 per cent at the end of the 2006-07 financial year (6 May 2008).