Allen & Overy (A&O) looks set to spark a fresh salary war after boosting its associate pay by 20 per cent.
A&Ohasannounced inflation-busting pay hikes for all of its lawyers as part of plans to stem the associate exodus.
The firm is raising its rates for London-based associates whohavetwoyears’post-qualification experience (PQE)from 59,000 to 62,000, with effect from 1 November. This will be followed by a further increase on 1 May 2006, when associates with two years’ PQE will be paid 71,000.
The firm also pays a discretionary bonus to all its staff. The average bonus over the past five years has been 12 per cent of basic salary. The next firmwide bonus payable to associates will be calculated on their November 2005 salaries. Assuming A&O pays a 12 per cent bonus at the end of the current financial year, an associate with two years’ PQE will pocket 78,440.
A&O declined to disclose thesalary bands for associates at other levels of seniority. However, 500 London-based associates will receive pay rises of at least 10 per cent and three years’ PQE associates will also receive increases of around 20 per cent.