The City of London (Jonathan Brady/PA)
(Picture: PA Archive)Magic circle London legal giant Allen & Overy has frozen the salaries of junior solicitors at £107,500 in an early sign that the red hot jobs market for young lawyers may be cooling.
An email seen by the RollonFriday website reveals that associates have been told that “after careful consideration of the market and with economic conditions becoming more challenging” the firm had “decided not to increase associate spot salaries at this time”.
The move marks an abrupt turn for one of the biggest players in London’s intensely competitive legal sector after it twice hiked the salaries of new qualified lawyers last year.
In last year’s high octane hiring war several top City firms were hiking newly qualified pay in June and then again in the Autumn. In the second round of increases in November, Allen & Overy matched Linklaters after its Magic Circle competitor increased pay to £107,500.
However some other rivals are continuing with pay rises for now. Clifford Chance announced in May that its junior lawyers were getting another pay rise of 16% to £125,000, matching rival Freshfields.
However all the British firms are being heavily ougunned by their US competitors with newly qualifieds at firms such as Gibson Dunn, Goodwin, Davis Polk, and Fried Frank all paying around £160,000.
Allen & Overy has also called off the pay review for senior associates. Associates at A&O are paid a fixed amount at each level, whereas senior associates are paid within a salary band - and those bands will also remain unchanged.
The firm said it would keep the freeze “under review.”
