Baker McKenzie has upped salaries for its newly qualified (NQ) associates in London to £118k.

The new rate marks a 7% increase from the previous figure of £110k and will be doled out alongside a discretionary bonus, Bakers said.

The rise sees the firm overtake the NQ base rates at London rival Macfarlanes and Magic Circle firm Slaughter and May, both of which have upped pay 7% to £115k. It also sees it stay ahead of DLA Piper and BCLP, which have raised their London NQ pay from £95k to £100k and £105k respectively. 

However, despite the increase Bakers remains behind Hogan Lovells, which in May raised NQ pay 12% from £107,5k to £120k, and the rest of the Magic Circle, all of which pay their NQ’s £125k. Allen & Overy and Linklaters upped their pay 16% from £107,500 earlier this year, having last year failed to match Clifford Chance and Freshfields Bruckhaus Deringer in raising their rates, citing challenging market conditions. 

Bakers said its trainee salaries would remain at the current rates of £50,000 for first years and £55,000 for second years.

Bakers’ London managing partner, Ed Poulton, said: “Our people are fundamental to our success as a firm, and we are determined not only to build an inclusive workplace for all, but also to reward in a consistent manner. We recognise that remuneration is one element of our package, as well as other important factors including our culture, offering a range of benefits and services and agile working arrangements. I am delighted to be able to announce this uplift in salaries for our NQs, who, alongside our other talented individuals, we hope enjoy long and fulfilling careers with Baker McKenzie.”

However, the new salaries pale in comparison to those offered to London NQs by the top US firms, which benefit from being anchored in the lucrative US market. 

Firms including Davis Polk & Wardwell, Weil Gotshal & Manges and Skadden Arps Slate Meagher & Flom have upped their rates to £165k in recent months, as part of a salary war for junior talent that kicked off during the pandemic and looks set to continue despite worsening economic conditions and news of redundancies at a number of US firms including Cooley, Goodwin Procter and Orrick. 

In May, BCLP said it was cutting 47 business services roles globally, including two in the UK, though movement on salaries in the UK suggests many leading firms are weathering the stagnant economy relatively well and will allay fears widespread job cuts are on the horizon.