Allen & Overy (A&O) has opted not to increase its associate pay levels for the 2011-12 financial year.

The firm's lawyers will continue to progress through the pay bands, although the current rates will remain unchanged. The firm said that the decision was based on a "flat trading year" in 2010-11.

Last year the firm made minor pay increases to its salary bands – which will now continue to range from £61,000 for a lawyer in the first year of post-qualification experience (PQE) to £94,000 for the most senior associates.

The largest pay rise last year was handed to those who qualified in March 2007, who saw salaries increased by 18.9%, compared to a 1.7% rise for the most junior associates. First-year trainee rates remained static at £38,000.

Commenting on the decision to hold the rates steady, A&O said in a statement: "Trading conditions in the UK market remain flat. Clients face the same pressures we do in this market and it would be difficult to justify an increase in salary rates. Our associates do, however, benefit from rolling through the bands, recognising the value of the contribution they make to our business."

The news makes A&O the second magic circle firm to announce pay rates this year after Slaughter and May announced minor salary increases earlier this month. The firm – which reviews its salaries twice a year and also put through small increases in November – took one-year PQE rates from £68,000 to £69,000 and made increases from £93,000 to £94,500 at the top end of the scale.