Newly-qualifieds joining in September this year will see their pay dip to £48,000 from a previous £50,000. Overall, associates at Clifford Chance will see their average pay increase drop to just over 4 per cent from a previous 6.7 per cent in 2002-03.
The firm said the changes have been made “to reflect the more difficult market environment”, although London managing partner Peter Charlton told The Lawyer the firm would conduct a review of the situation in November.
On the potential savings, Charlton said: “The savings won’t be that significant, but it’s the right thing to do in this market.”
The period over which associates’ individual pay and bonuses are assessed will also change to 31 April, mirroring the financial year, as opposed to the calendar year.
The decision is likely to inspire other firms to do the same. SJ Berwin and then Clifford Chance kick-started the UK salary war in 2000 when they offered £45,000 and £42,000 respectively in a bid to compete with US firms’ huge pay packages.
Each of the magic circle firms now pay £50,000, as well as top 10 firms such as Herbert Smith, Lovells and Norton Rose.
Charlton confirmed the firm’s intention to take on its full quota of 120 newly-qualifieds for this year, and expects this number to remain constant in the next 12 months.