Salary wars: Latham latest to raise London salaries while Clifford Chance hikes US pay

Latham & Watkins has become the latest firm to raise salaries for its London lawyers to match the new market rates set by Cravath Swaine & Moore last week.

An internal memo revealed that Latham would follow Cravath in paying $180,000 to first year associates, equivalent to £124,000, adding that it would apply to all associates in “the US, London, the Middle East, Beijing, Shanghai and Hong Kong as well as US and UK qualified associates in Tokyo.”

Meanwhile, Clifford Chance has also matched the pay rises of its rivals in the US by hiking its New York associates’ salaries to Cravath levels.

The firm announced that the starting salary for first-year, or newly-qualified (NQ) US associates will increase to $180,000 (£124,000), in line with the rates set by other firms in the last week.

Pay will continue to rise each year up to $315,000 for associates in the class of 2008, or seven years post-qualification. More senior associates will receive $325,000.

Salaries for US summer interns will be increased to the semi-monthly rate of $7,500.

The news means Clifford Chance’s New York lawyers will earn far more than their London counterparts. Announcing a pay rise for UK associates last week, the firm said its NQs will receive a maximum £85,000, while 1PQEs will pick up £95,000.

Cravath Swaine & Moore was the first firm to raise its New York base pay for first-year associates. It has been followed by other firms including Kirkland & Ellis and Milbank Tweed Hadley & McCloy.