The race to the bottom - or the top, depending on your view of where this will all end - has seen US legal giant Milbank Tweed Hadley & McCloy increase its law associate salaries by over $US10,00 plus.

The changes take effect from 1 July and will see associates in their first, second and third years increase by that amount with a starting salary at Milbank at $US190,000.

The increases take effect for lawyers working in the firm in any of its offices, which are 12 globally including the major legal centres like London, Singapore and of course its big city US offices.

Generally the race for top salaries among the US law firms has been between Cravath Swaine & Moore, Milbank and Paul Weiss.

The 690-lawyer firm’s 2017 financial results show the fifth year when it has shown solid growth, with profits per equity partner rising nearly 11 percent last year to $3.46 million. Revenue per lawyer increased 3 percent to $1.33 million.

The latest announcements,reported in The American Lawyer show the vast sums payable to younger lawyers who can be earning $US330,000 at Milbank in their eighth year.

The magazine outline the new salaries for all classes:

• 1st year — $190,000
• 2nd year — $200,000
• 3rd year — $220,000
• 4th year — $250,000
• 5th year — $275,000
• 6th year — $295,000
• 7th year — $315,000
• 8th year — $330,000

So far as Summer associate salaries are concerned, these too increase on a pro rata basis

In an interview with the magazine, Milbank chairman Scott Edelman said, “What we’re trying to do is set fair, market-leading compensation for our associates. We’re not in a race with other firms, but at the same time, we thought this was an appropriate time for an increase, and we want our associates to know how much they’re valued.”

He said the firm wanted to recognize associates’ contribution to Milbank’s success and its ability to handle high-stakes, complex work. “Our people are our greatest assets. We’ve been working hard, we’ve been very busy,” he said. “We’re committed to offering compensation at the top of the market.”

Cravaths Benchmark

The benchmark for associate compensation was set by Cravaths in 2016 when they set the level at $20,000 increase to $180,000. Milbank and many other firms immediately matched the lofty figure with their own increases, although many of the London Magic Circle firms found it difficult to match the US firms' generosity.

“We try to lead the market in terms of associate development and training,” Edelman said, noting the firm’s Milbank@Harvard training program. “We didn’t see the need to wait for somebody else to make an increase that we think is appropriate.”

The salary increases have been criticised in some quarters due to the vast amounts both hitting partner profits but also seeing an endless quest to attract top legal talent in a manner that is financially damaging for some, with the legal carcasses of law firms that financially failed being a not-distant memory for many.

Other firms are trying other tactics to attract talent.

Lasst week, Weil, Gotshal & Manges told associates it will shorten the path to partnership by two years in order to retain more talented associates.