Linklaters has upped the ante in the City's battle for talent by announcing a 40% hike in the maintenance grants it will pay its legal practice course (LPC) students.

Currently, the magic circle firm gives its LPC students studying in London and Oxford £5,000 a year, and £4,500 to those studying elsewhere. This will be increased to £7,000 from September 2006.


Students on the graduate diploma in law (formerly known as the CPE) will see their grants rise to £6,000 if studying in London and £5,000 if studying elsewhere.


The increase will coincide with the start of the firm's new LPC, developed in collaboration with the College of Law in London.


City rival Clifford Chance, which has also developed a bespoke LPC, said it will be reviewing the maintenance grants for 2006, to remain competitive.


Clare Harris, recruitment manager at Lovells, indicated it is also likely to increase its maintenance grants by a similar amount to Linklaters' when they are next reviewed in 2006.


However, Allen & Overy said it had no plans to increase its 2006 maintenance grants. All the firms currently pay annual maintenance grants of £5,000 to students in London and £4,500 to those studying outside the capital.


Ms Harris said: 'I'm not surprised the grants are starting to go up. Given that most students, especially those in London, carry huge amounts of debt, a 40% increase is not actually that large an amount.'


Simon Firth, the Linklaters partner with responsibility for trainees, said the firm took the step in response to the concerns of students about the cost of living in London and to ensure the firm attracted the best people.