Shearman & Sterling will splash out an estimated 500,000 this year on generous pay hikes for its UK-qualified lawyers to make itself more attractive to potential recruits.
The packages will benefit all 80 UK-qualified associates in London and across the firm's international network.
Newly qualified lawyers will be paid 60,000, up from 55,000, with the six-monthly pay bands for all UK-qualified associates also being raised.
Last September saw London increase pay for first-year trainees, from 30,000 to 35,000, and from 34,000 up to 37,500 for second-years.
While the firm has made some headway in hiring trainees and partners in London, it has struggled to attract mid-level UK associates, despite the promise of significant bonuses.
London managing partner Kenneth MacRitchie said: "This reflects our desire to continue to recruit more associates. These increases put us in a position where we're attractive both on quality and compensation."
At the same time it is understood that White & Case is increasing its salaries for newly qualified lawyers by 5 per cent to 63,000.