Herbert Smith Freehills has stretched the available pay for its newly qualified (NQ) associates to £105,000, becoming the latest firm to enter the fight for junior talent.

The figure represents the total compensation package, including bonus, available to NQs.

Last year, the Anglo-Australian firm introduced a new associate salary structure, placing greater emphasis on associates' performance and contributions to the firm and less on seniority.

HSF UK and EMEA executive partner Ian Cox said in a statement: "It is important that we continue to attract and retain the best talent to deliver the service our clients expect and deserve. Newly qualified associates – along with all our junior associates – represent a key pool of talent and the future of the firm. We are determined to nurture their talents and help them realise their full potential at HSF, and to reward them competitively whilst doing so."

However, the firm did not provide further information on how the new pay scale will operate.

In a shift towards more merit-linked pay, last year the firm introduced 'career milestones', whereby total compensation for NQs to lawyers with two years' post-qualification experience stretched from £93,000 at the bottom to £114,000 for the best performers.

Yesterday (July 1), City firm Macfarlanes joined the fray of firms increasing NQ compensation. From September, pay for NQs at the City firm will now range from £98,600 to £110,250, which comprises an improved base salary of £85,000 in addition to individual and firm-wide bonuses.

Freshfields fired the starting pistol for the increases in May, bolstering NQ pay to £100,000, while Linklaters became the last of the Magic Circle firms to match that rate yesterday.

Other firms to have increased pay include Hogan Lovells, where pay can now reach £117,000 for NQs, and Pinsent Masons which raised pay by £2,500 for NQs, from £70,000 to £72,500.