US firms are set to heat up the simmering City recruitment market further this spring, with many top players gearing up for major pay increases for their UK-qualified lawyers.

US firms are indicating that more rises are in the pipeline among the larger London branches, which typically pay their UK assistants in fixed sterling rates, in the wake of last month's steep hikes from Manhattan's legal elite.

In February, New York's top firms set a new starting salary of $145,000 (£82,000), a rise of $20,000 (£11,400) for their US lawyers. Leading New York firms with relatively small foreign law practices such as Sullivan & Cromwell, Skadden Arps Slate Meagher & Flom, Debevoise & Plimpton, Mil-bank Tweed Hadley & McCloy and Simpson Thacher & Bartlett have confirmed the rise will be passed on to UK lawyers on a pre-set dollar/ sterling exchange rate.

However, a potentially more dramatic development could be the stance of firms with larger UK law practices, such as Shearman & Sterling, Weil Gotshal & Manges and White & Case, which pay socalled 'mid-Atlantic' rates for their UK lawyers. Shearman currently offers newly-qualified UK lawyers £60,000, while Weil Gotshal and White & Case pay £62,500 and £63,000 respectively.

Such firms, which are regarded as more influential in the City recruitment market than their conservative Manhattan rivals, are set to review their salaries around May to coincide with City rivals. Other firms expected to assess their salaries in the spring include LeBoeuf Lamb Greene & MacRae and Baker & McKenzie.

Another indication of the expansive mood among US law firms was provided last week by Cleary Gottlieb Steen & Hamilton, which confirmed it was to raise its starting salaries for UK lawyers from just under £75,000 to £85,000.

The rise means that newly-qualified lawyers can expect to earn more than £100,000 once bonuses are taken into account.

Cleary London partner Glen Scarcliffe told Legal Week: "There is a group of 10-12 US firms in London paying their UK associates New York rates and we are part of that top group. When the increases came through in the US, we did pretty much the same thing here."

The move by US firms to boost salaries has increased expectations that top London firms will this year raise their salaries substantially in order to retain staff in an increasingly competitive market.

One recruiter commented: "The US firms are back in the market in a big way. They are paying a lot of money and the magic circle firms cannot compete with that."