A&O Shearman. Credit: Allen & Overy courtesy photo / A&O Shearman

A&O Shearman has joined its rivals Freshfields Bruckhaus Deringer, Clifford Chance and Linklaters and increased its salary for newly qualified solicitors to £150,000.

Following the increases by its competitors, A&O Shearman had been under pressure to match the uplift to the new benchmark of £150,000, set by Freshfields in early May. Before the merger of Allen & Overy and Shearman & Sterling went live last month, the firm had decided to peg its NQ rates to A&O's pay of £125,000, despite Shearman & Sterling NQ associates in London previously receiving £145,000.

The increase is effective from May 1.

Denise Gibson, the firm's London managing partner, commented: "Our compensation structure gives us flexibility to reward expertise, performance and wider contribution and is designed to be highly competitive to reflect the markets in which we operate.

"Trainees and NQs are a key part of the firm's future and A&O Shearman provides unmatched opportunities for them to build successful careers."

This month, Freshfields Bruckhaus Deringer, Linklaters, and Clifford Chance all increased their own NQ salaries to the new £150,000 benchmark. When Freshfields moved first, bringing its NQ pay closer to that of its U.S. rivals than ever before, it set off a wave of speculation, with many expecting a renewed salary war.

Also last month, Quinn Emanuel Urquhart & Sullivan boosted its offering to NQs from £152,000 to £180,000, setting the highest rate on offer among corporate law firms in London, alongside Gibson Dunn & Crutcher.

A&O Shearman has also increased its trainee salaries. Those in their first year of training will see an increase from £50,000 to £56,000, while second-year trainees will see an increase from £55,000 to £61,000.

It remains to be seen if the other top law firms, who tend to follow the scale set by Cravath Swaine & Moore, will reciprocate. These firms tend to include Milbank, Vinson & Elkins, Akin and Fried Frank Harris Shriver & Jacobson, among others, all of whom pay their NQ London lawyers more than £170,000.