This second quarter has seen Allen & Overy (A&O) launch a comprehensive review with external consultants drafted in to look at both its pay structure for junior lawyers and to compare the firm’s levels of pay against market rates.
With the review expected to conclude within the next eight weeks, options being considered includes revising levels of base pay, bonuses and benefits but will also look at the structure under which associates can be paid. Currently the firm operates an associate lockstep structure with junior lawyers progressing up salary bands depending on tenure while also receiving bonuses. It is understood there is unlikely to be a radical change to a pure performance model.
A&O has yet to confirm its associate salary levels for this financial year and is the last of the Magic Circle firms to do so but any changes to pay will be backdated to 1 May.
Last year it decided to freeze pay for trainee and newly-qualified lawyers at 2013 levels but raised its senior associate entry level salary by £5,000, up from £100,000 to £105,000. Then in October it upped its trainee, junior and mid-associate level pay after reviewing the market salary at half year, with first and second seat trainees receiving £1,000 more, taking them to £40,000 and £45,000 respectively, while newly qualified associates had pay rises from £64,000 to £66,500.
The news emerges following Clifford Chance announcing its associate pay bands earlier this month and matching its newly qualified rates with Slaughter and May at £70,000 while also meeting Linklaters’ higher pay for those with two and three year post-qualified experience. Freshfields, Bruckhaus Deringer, meanwhile, decide to freeze salaries for junior lawyers at 2014’s levels.