Sometimes you wonder how US firms ever became successful, such is their tendency to misread the signs. Take the Californian boom: bliss it was in that dawn to be alive, blah blah blah. But after the dotcom revolution came the terror. And now, with the sound of tumbrils echoing around Palo Alto, in come hordes of East Coast firms - despite the fact that there isn't actually any work around. And the reason they're opening offices? Er, because the property's cheap, apparently. On that logic, expect Allen & Overy to open in Walsall next week. These whimsical decisions are not just confined to California. In London, just when you might have thought clowntime was over in the recruitment market, along comes Washington DC firm Covington & Burling with its apparently insane offer of £85,500 to London newly-qualifieds. Now, as business journalists, our first question would normally be along the lines of: "How does this commitment to organic growth in London fit in with your expansion plans in Europe?" But what we really want to ask is: "Are you entirely barking?" There is only one possible reason for Covington's decision. Most US firms pay a transatlantic rate for their trainees and young assistants - usually around 10 or 15 per cent premium on the magic circle. Shearman & Sterling pays £55,000 and Weil Gotshal £60,000, for example. Yet this has attendant difficulties, particularly in offices with large numbers of US associates; there used to be terrible tension in Shearman's London office, with US and UK lawyers all on different pay scales. The only US firm that pays more to newly-qualifieds is Skadden Arps, which pips Covington at a whopping £89,000. Covington's decision almost makes you nostalgic. It's the mark of happier, more carefree times. (Remember the buzz back then? Did we really think it could last?) Yet if a salary of £85,500 for 25-year-olds was barely justifiable two years ago, on what level is it justifiable now? It's not like there's a dearth of lawyers; on the contrary, come March next year there'll be an awful lot more newly-qualifieds on the market as more and more City firms get tougher on trainee retention. I don't envy those young lawyers; we constantly run into assistants who are unhappy but are trapped by the salaries they earn. £85,000 may seem like a fantastic amount, but it looks more like golden handcuffs to me.