US firm Morgan Lewis & Bockius will pay its UK-based lawyers - both partners and associates - at US rates.
"The firm is moving in the direction of trying to balance rates between the US and here," says managing partner of the London office Tom Benz.
The Philadelphia-based firm is the latest to bring its pay structure into line with US salaries.
In previous years, US firms have paid their British lawyers at premium London rates but the increasing trend towards even higher US salaries will be of grave concern to leading City firms.
Pay for 1991-qualified lawyers at leading UK and US firms based in London can differ by as much as u75,000, according to a recent survey conducted by Michael Page Legal in association with The Lawyer.
Benz says it is a question of productivity, and the fact that the UK-based lawyers are producing quality work makes it increasingly difficult to justify any differential.
However, Benz says that although it is moving in the direction of US rates, "whether it is exact parity is another question".
Nick Robbins, a partner with international legal consultants Garfield Robbins, says that leading UK practices are increasingly prepared to meet the astronomical salaries on offer for senior associates at US firms.
This can bring the differential between UK and US firms down to as little as u15,000 for associates with four or five years' practising experience, he says.
Arnold & Porter is one US firm that aims to continue to pay associates at London rates. Administrative partner in London James Dinnage says: "Our policy is focused on being competitive in the local market. We are here as a local firm."
However, partners are remunerated commensurate with their US colleagues.
Dinnage says a lot of his firm's work is locally generated, but if a major proportion of a firm's work is derived from clients based in the US it makes sense to charge out at US rates and pay US salaries.