When Freshfields became the first U.K. firm to announce a pay hike for newly qualified (NQ) associates to £100,000 in May, there was some doubt as to whether the rest of the Magic Circle would follow suit. Fast forward just two months, and 13 other firms – including all of the Magic Circle – have raised their NQ pay.

Pay rises that have come from firms in the last week include Travers Smith, Stephenson Harwood, and Simmons & Simmons. Firms yet to have made an announcement regarding pay rises, but whose competitors have increased salaries, include CMS and Bryan Cave Leighton Paisner, with spokespeople for both firms saying that internal discussions about the subject are still ongoing.

But what exactly has changed has differed depending on the firm in question. Legal Week has rounded up all of the firms to explain what steps each has taken.

The pay war has been notably frustrating for some in the City, including Linklaters' Gideon Moore, who told Legal Week: "If there are future hikes, they won't be coming from Linklaters."

"You have to ask the people who started this process what exactly they expected to achieve from it," he added.

Whatever they hoped to achieve, the end result has been that almost every firm has followed suit.

Tom Moore, senior consultant at Melton Legal Search, said: "U.K. firms, as well as U.S. firms with PEP roughly between $1.5-$2.5 million, are under pay pressure from the elite U.S. firms. The Magic Circle have largely done enough to retain and hire the best junior lawyers by narrowing the pay disparity in this latest round, once you combine that with the prestige of the firms, career prospects and quality of work."

He added that partners based at the next tier of firms and at mid-tier U.K. firms are becoming increasingly frustrated by their financial inability to compete with the increases brought by the rest of the market.

"This is most stark between [five to eight years'] PQE, where the pay gap is widest," he added. "Gaps in the senior associate ranks are now common in leveraged finance, PE [private equity], funds, secondaries and structured finance, where the billable rates are higher and U.S. firms can justify paying more for the best talent.

"Partners at these firms are frustrated by the lack of associate support, [which] can often take them away from business development and hinders the growth of practices."