Allen & Overy has boosted the pay of junior lawyers by over 25% by shifting standard bonuses into base salaries.

The move follows feedback from associates that informed a London pay review.

A new bonus scheme will operate for the 2016 financial year to reward ‘exceptional contribution’.

The new pay structure means solicitors with one year’s PQE will see their salaries jump 27% to £92,000. Those with two years’ PQE will get a rise from £82,500 to £104,500, and those with three years’ PQE will get £115,000 – up £22,000.

Pay for newly qualified solicitors will rise 18% to £78,500.

Wim Dejonghe, global managing partner at the magic circle firm, said: ‘Our new salary structure recognises the significant contribution our associates make to the success of the business.

‘The record results we reported this year would not have been possible without the hard work of our associates. By adding our standard bonus to base salaries we provide our associates with more certainty as to their pay and more consistent recognition for the work they do every day.’ 

Norton Rose Fulbright, meanwhile, has bumped up newly qualified salaries by 7.5% to £70,000, bringing the firm into line with Slaughter and May, Clifford Chance and Hogan Lovells.

The firm has also boosted trainee pay by £1,500 to £41,000 for first-years, and to £46,000 for second-years. 

Ben Daniels, a consultant at legal recruiter Edwards Gibson, said this year’s trend of large pay rises reflects the fact legal services have emerged strongly from recession.

He added: ‘Combine this with the cuts firms made to training contracts and this means fewer lawyers are matriculating.

‘With increased workstreams junior lawyers became a scarce commodity. There is no quick fix to undersupply, thus market conditions dictate [firms] have to pay more.’