Kirkland & Ellis has put a cap on associate salaries in London to avoid large fluctuations in pay caused by volatile exchange rates.

The firm is understood to have introduced an upper end limit at $1.63 to every £1 and a lower end cap at $1.25 to every £1.

The changes only apply in London.

Kirkland pegs associate salaries to the market, paying them monthly spot rates. This means that unlike other firms that pay average rates, such as Latham & Watkins, its lawyers' salaries have fluctuated hugely in recent months.

Sterling fell heavily against the dollar in the aftermath of the Brexit vote. It has strengthened recently following the inauguration of Donald Trump as US president.

The current conversion rate stands at $1.27 to £1.

"At the moment, associates are paid spot rates rather than a yearly average. It gets to a certain point where it gets silly; the salaries were way out of reasonable figures," said a partner at the firm.

The news comes shortly after Kirkland also changed its framework for allocating equity partner profits, cutting the equity shares of some of its top partners.

Kirkland's litigation partners were particularly hard hit by the move, reported in December, with some senior partners seeing their shares slashed significantly.

Kirkland & Ellis associates were given a payrise in June last year, when the firm matched a new payscale introduced by New York firm Cravath Swaine & Moore, which committed to paying first-year lawyers $180,000 (£142,000) a year.

Kirkland is understood to have matched Cravath's associate pay scale in all of its offices.