The Americans have done it again. No sooner had some of the UK's largest law firms narrowed the UK/US pay gap for junior lawyers by upping combined pay and bonus for NQs to around £85,000 then New York ushered in its first associate pay rises in nearly 10 years.
Where Cravath led the rest of the pack followed, and most leading US firms have now matched the new benchmark, which effectively sets first year (the equivalent of NQ in the UK) pay at $180,000 (around £124,000 at current rates).
With most extending the new rate to their London offices as well as those in the US and now Hong Kong, UK firms will feel the pressure of this rise in the war for talent, as well as on their wallets as both Freshfields and Clifford Chance have confirmed they will match Cravath's rate in New York.
Whether or not clients or partners approve of the increases, in a market as uncertain as today's the rises will not necessarily be good news for lawyers in the longer term.
Even before news of the increases firms including DLA Piper and Norton Rose Fulbright had announced support staff redundancies in the UK and new research from Legal Week has found many partners believe lawyer redundancies will follow, as well as further support staff cuts.
Other key stories last week include more fallout from the BHS inquiry, with Olswang staying silent on its advisory fees on BHS due to legal privilege, while Linklaters saw its fees to Arcadia revealed as part of the ongoing inquiry into the retailer's sale and subsequent collapse into administration.
Elsewhere Allen & Overy is looking to appraise its partners on a broader - and softer - set of skills while DLA Piper is looking for someone to spearhead its innovation efforts after the previous post-holder left the firm.
Meanwhile Barclays has asked firms pitching for its new legal panel to produce a three-tier rate card, pricing less complicated work at lower rates.
Other highlights last week include:
Latham & Watkins hires Dechert City finance partner
White & Case hires Freshfields London banking partner
PwC Legal makes up five in all female UK promotions round
Baker & McKenzie London head elected as firm's global chair
White & Case set for key role on Saudi Aramco float
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