Ashurst Morris Crisp is hiking up salaries for newly-qualified lawyers as middle tier firms bow to pressure to pay the increasingly inflated market rate.
From 1 May, newly-qualifieds will be paid £42,000 compared to the current rate of £35,000.
Ashursts human resources manager Stuart Walker says that the decision to increase levels of pay follows the current market rate set by Clifford Chance.
“Clearly there is a market rate for salaries and Ashursts pay at the quality rate,” he says.
City giant Allen & Overy is also following Clifford Chance's example by upping pay for its newly-qualified lawyers to £42,000.
But it is unclear how Ashursts will finance the increase as partners at Ashursts made £425,000 last year, while Clifford Chance's profits per partner in 1999 reached £605,000 and Allen & Overy's partners reaped £595,000.
Although the current market rate has influenced Ashursts' move, one source says that the potential merger with US giant Latham & Watkins may be a contributing factor (The Lawyer, 7 February).
He says: “It is quite unusual for Ashursts to pay at a rate on the same level as Clifford Chance and SJ Berwin which pay at a very competitive rate against US firms.
“Maybe it is trying to get its pay to a level where it is on a level playing field with a US firm.”