Robust pay rises for assistants are coming at a heavy price, according to Legal Week research that shows many top City firms have raised annual billing targets this year.

Four of London's top 10 firms have admitted raising annual billing targets for assistants during the last year.

Clifford Chance (CC) and Norton Rose both increased their annual billing targets by about 10% with Norton Rose lawyers now expected to achieve between 1,700 and 1,900 billable hours each year.

Allen & Overy has upped its billable hours target from 1,700 to 1,750, while Herbert Smith also confirmed a "single digit" percentage increase in annual billing targets.

There is also evidence that changes to bonuses announced by many City firms are linked to more aggressive billing expectations, even when under-lying targets have not altered.

At the same time, virtually all of the top 10 City firms are reporting increases in charge-out rates with CC and Norton Rose both upping rates by about 5%, Ashurst by 8% and Simmons & Simmons and Freshfields reporting increases of up to 10%, depending on the practice area.

The rise in billing targets suggests London firms, which generally unveiled 10% hikes in pay rates for assistants this year, will struggle to win the hearts of their heavily-worked assistants. In the latest Legal Week web poll only 18% of the respondents believed assistants currently earn too much, compared with 67% who said partners are overpaid in a similar survey last month.

One head of corporate at a magic circle firm said: "It is not completely a supplier's market yet, but there is more stress on internal leverage. Most firms will have under-recruited in the recession and now are desperately searching for staff."

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