Shearman & Sterling has announced salary hikes for its English-qualified lawyers, increasing pay levels in the firm's three-tier merit-based system by as much as 15%.

The salary increases, which took effect from 1 May, will see the basic pay level for junior associates – those with up to three-and-a-half post-qualification experience (PQE) – rise 7% from £73,000 to £78,000, with the maximum amount junior associates can be paid rising 14% from £95,000 to £108,000.

Mid-level associates with between three-and-a-half and six years' PQE will now earn between £109,000 and £142,000 – increases of around 15% on the former pay range of £96,000-£103,000.

At the senior associate level, lawyers who have been at the firm for more than six-and-a half-years will now earn between £143,000 and £175,000, with the lower end of the pay band rising 15% from £124,000 and the upper limit up 9% from £160,000.

The changes apply to English-qualified lawyers and those training to be English-qualified in the US firm's London and Abu Dhabi offices.

London managing partner Nick Buckworth commented: "The decision to increase our salary rates reflects our ongoing commitment to rewarding the very talented lawyers we have working here and recognising their contribution to the firm's success. As part of that commitment we continue to focus on and support individual associate career development and progression."

Shearman ditched its associate lockstep across its UK, Asia and Middle East offices from 1 May 2010 in favour of the merit-based pay system. Under the new system associates are assessed twice a year against a number of criteria including client relationships, legal and technical capabilities and interpersonal skills.

The new comes after Freshfields Bruckhaus Deringer confirmed it will be increasing in its associate pay bands for 2011, opting for rises of between 2% and 2.6% for junior lawyers. Associate pay at the UK's magic circle firms ranges from around £61,000 for newly-qualified associates to as much as £88,000 for those with three year's PQE.