Shearman & Sterling has announced an increase of 7% in its London associate salaries, putting the firm's rates well ahead of those at top City firms.

The rises mean a newly-qualified solicitor based at the firm's London office will get paid £80,000, up from a figure of £75,000 last year.

Senior associates will receive salary increases on a discretionary basis, with the base salary level moving up to £170,000 a year.

Trainee solicitors will also get a bump-up from the review, with first-years now pocketing £39,000 – up from £36,500 – and second-years in line for £41,500. The increases will make them among the highest-earning trainees in the City.

Commenting on the move, new Shearman London chief Anthony Ward (pictured) said: "These healthy increases reflect not only our strong market position on UK compensation but also the increasingly robust financial position of the firm, as demonstrated by a record year on revenue and profits in 2007."

He added: "Furthermore, it is indicative of the value which we attribute to the ongoing contribution, commitment and engagement of our associates and trainees."

Shearman becomes the first major firm to announce salary increases this year, with a raft of UK and US rivals set to announce adjustments of their own in coming weeks.

However, few firms are expected to make major increases as advisers continue to feel the impact of the credit crunch. City giants Clifford Chance and Linklaters among those to have already indicated to Legal Week that substantial raises for their junior lawyers are unlikely.

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