City firms are closing ranks to halt the escalating salary war. A host of firms have already had informal discussions to keep newly-qualified salaries below £50,000.
But The Lawyer can exclusively reveal that Clifford Chance and SJ Berwin have already taken the decision not to broach the £50,000 mark this year. Clifford Chance will put up its salaries for newly-qualifieds to £48,000 from £42,000.
A year ago, SJ Berwin sparked a UK salary inflation when it put newly-qualified salaries up by as much as 25 per cent to £45,000 (The Lawyer, 21 February 2000).
The move was in response to the US firms gaining ground with their City practices. A host of US firms, including Sullivan & Cromwell, Dewey Ballantine and Latham & Watkins, pay New York rates to London assistants.
SJ Berwin senior partner David Harrel confirms that despite speculation to the contrary, his firm will not be raising newly-qualified salaries to £50,000. He says: “We made a step change last year. This is very much consolidating on that. We don’t think it prudent to be chucking large sums of money at people.
“Associates aren’t foolish. They’d be concerned to see huge pay increases when they can see the marketplace looking a bit softer.”