What impact will fresh pay war have on associates in the City of London?
US giant Cravath Swaine & Moore has set down a fresh salary marker for its rivals after upping its already hefty rates for associates by as much as $20,000 (£16,000).
The uplift comes just days after fellow New Yorker Milbank bumped salaries for newly qualified (NQ) lawyers to $225,000, chucking the same rises the way of its associates in the City of London. This saw it climb to the very top of our 2024 Firms Most List with an NQ sterling rate of £183,409.
But known for setting the bar when it comes to salaries in the US, Cravath hasn’t wasted anytime in re-taking its crown. The firm — which doesn’t offer UK training contracts despite having presence in London since 1973 — matched Milbank’s rates for NQs through to 3PQE, and went over and above for those further up the ladder.
Cravath’s 4PQErs will now earn a salary $310,000 (£245,000), which is roughly £4,000 more thank their counterparts at Milbank and equates to an overall rise of nearly £12,000. Meanwhile, those at five and six PQE have seen their salaries swell to $365,000 (£290,000) and $390,000 (£310,000), respectively — increases of $20,000 (£16,000).
Others US outfits have since moved to match Cravath’s new rates, with the likes of Baker McKenzie, Cleary Gottlieb, Dechert, Hogan Lovells and Paul Hasting, all now offering the same levels of cash to their US associates.
But a question mark remains over whether this fresh pay war will have any impact on the City of London. Milbank, although quickly trumped by Cravath, is the only firm so far to confirm that its UK associates will receive the new rates. Will other elite US firms follow? Watch this space…