Freshfields Bruckhaus Deringer has confirmed associate salaries under its new merit-based pay scheme, with newly-qualified (NQ) lawyers set to make at least £65,000 – £3,500 more than those at rival magic circle firms.

The firm has outlined salary ranges for all four of its 'milestone' pay bands, which came into effect from the start of this month and which replace the previous system of paying associates based on how many years post qualification experience (PQE) they had.

The bands are made up of a foundation level with a salary range of between £65,000 and £72,500, which will include most lawyers of between NQ and one years' PQE.

Level one, where the salaries range from £80,000 to £92,500, will contain the majority of lawyers with between two years' PQE and four years' PQE, while level two, where salaries will range from £100,000 to £107,500, will typically house lawyers with upwards of four years' PQE.

Pay for milestone three starts at £115,000 and there is no upper cap for lawyers in this band, where associates will typically have six years' PQE.

The firm confirmed that no associate will receive less than they were on last year, however as the entire system is merit-based, they could be slotted into a higher than average pay band based on individual performance. The firm's existing associate bonus scheme will continue to apply.

The rates put Freshfields' pay ahead of its magic circle peers, where NQ pay stands at £61,500 for those to have announced so far – Slaughter and May, Linklaters and Allen & Overy. Freshfields paid its NQs £61,500 last year.

Trainee salaries remain unchanged for the second year running at £39,000 and £44,000 for the first and second year respectively.

Freshfields first touted the milestones idea in 2009, however it was not formally introduced until April 2011 when associates were placed into one of the four levels, but continued to be paid according to the PQE system.

The firm has stated that bonuses for 2011-12 will be determined by assessing individual performance and contribution, the financial performance of the firm, the London office and particular practice groups.

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