Raft of US firms raise associate pay to match Cravath scale

Paul Hastings, McDermott and Baker McKenzie among those falling in line after Cravath leapfrogged earlier raises at Milbank

A number of top US law firms have confirmed they are raising base pay for their US associates to match the latest salary scale at pacesetter Cravath Swaine & Moore. 

McDermott Will & Emery and Paul Hastings said earlier this week they were upping pay in line with Cravath, with Paul Weiss, Dechert, Hogan Lovells, Proskauer Rose, Baker McKenzie and Skadden Arps since falling into line, according to reports in Law.com and Above the Law. 

The raises will see pay for junior associates at the firms reach $225,000, rising to $420,000 for the class of 2017. 

Cravath’s pay hike, detailed in a firm memo first reported by Above the Law on 28 November, followed Milbank firing the starting gun on the latest round of raises earlier this month when it said it was boosting pay for all associates by $10,000. 

Junior lawyers at firms using the Cravath scale will receive the same base pay as those at Milbank, though mid level and senior associates will do even better, with those from the classes of 2020 to 2017 receiving between $5,000 and $10,000 more than their contemporaries at Milbank.  

Cravath is also doling out year-end bonuses ranging from $15,000 to $105,000 according to the memo, matching Milbank’s figures and the scale used by leading firms over the past two years. McDermott, Paul Hastings and Dechert have confirmed they are matching the bonus scale. 

It remains to be seen whether the wider market will settle around the benchmark set by Cravath, or whether firms will seek to gain an advantage in the current hyper-competitive recruitment market by exceeding its rates. 

Milbank has often been a first mover in terms of pay and bonuses among the top US firms in recent years. It kicked off waves of associate pay increases last year and in 2021, when it raised pay twice in a matter of weeks to keep up with rivals that had overtaken it. 

The salary wars among the US firms has rippled out to the UK, with leading City firms leapfrogging one another in a bid to stay competitive but remaining some way behind their US rivals, which benefit from being anchored in the lucrative US market. 

Slaughter and May said earlier this month it had upped pay for its newly qualified lawyers to £115k, a move that saw it match its Magic Circle rivals Allen & Overy, Clifford Chance, Freshfields Bruckhaus Deringer and Linklaters, which pay the most among UK firms, but still lag far behind the £170k or more paid by US rivals including Kirkland & Ellis and Latham & Watkins.  

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