London's leading law firms have set the new starting rate for lawyers at £55,000 after finalising pay shake-ups that concentrate pay rises on their coveted ranks of mid-level associates.

As reported on legalweek.com (28 April), Norton Rose, Herbert Smith and Simmons & Simmons all announced they were to increase newly-qualified pay by 10% to £55,000, while Linklaters is starting its assistant pay scale at £55,100.

The pay rises kick in on 1 May and see Linklaters' newly qualified salaries rising from £52,000 to £55,100 while Herbert Smith, Norton Rose and Simmons & Simmons have all taken their newly qualified salaries from £50,000 to £55,000.

Slaughter and May and Lovells have announced rises just below the new benchmark of £54,000 and £53,000 respectively. Lovells has also beefed up its bonus package, giving all associates the opportunity to gain a bonus of up to 30% of their salary – up from 20%.

Linklaters, meanwhile, is giving the biggest increases to lawyers of four or more years' experience. They will see their salaries rise by 12%. This means a four-year qualified managing associate will earn £88,600 before bonuses, up from around £79,000, making the City giant the top-paying London practice for mid-level associates.

The firm has also brought in a scheme to allow trainees and solicitors to win an extra day of paid leave per quarter if they hit utilisation targets. Staff can bank up to 20 days of leave, allowing them to take a mini sabbatical after four years.

Trainee salaries have also risen across the board with all of the firms mentioned announcing new rates of at least £30,000. Simon Firth, Linklaters' trainee development partner, commented: "The market has been picking up and all firms are chasing quality people. If you are competing in that market, you cannot be that far from the rest."

The pattern of sharp rises for trainees and mid-level associates is set to be followed by most of London's leading firms, with Freshfields Bruckhaus Deringer expected to confirm similar rises within days.

The policy of focusing the best rises on mid-level assistants contrasts with the last pay war in 2000, when junior lawyers benefited most.

Ruth Grant, Lovells' London managing partner, said: "These things tend to go in cycles. The market has been quiet in recent years with salaries not increasing much. That has now shifted, so these rises reflect that."

While London firms moved as a pack, Shearman & Sterling unveiled aggressive 20% rises across the board for UK-qualified lawyers, with newly qualified pay rising by £12,000 to £72,000.

The firm, which has been accused of lagging behind more recent US arrivals in London, is regarded as a benchmark practice for so-called mid-Atlantic firms, which pay rates set between those of leading Manhattan and London firms.

Kenneth MacRitchie, Shearman's London managing partner, told Legal Week: "There are a lot of options open to associates and that is part of the reason why we have gone above past years with a bigger hike. I am surprised magic circle firms have not reacted more to that competition."