US-headquartered firm Goodwin has upped the ante on newly-qualified pay, with the biggest declared NQ salary ever paid in the Square Mile.

New associates based in the UK will be paid £161,500 a year as of this month, rising to £169,000 in the second year after qualifying. Salaries then rise to £188,000 and then £214,000 over two years.

The announcement continues the trend of City firms competing for talent with increasingly lucrative wage packets.

Meanwhile, the firm, which has 1,600 staff in 13 locations including London and Cambridge, has announced a scheme to pay for associates’ holidays, which applies to its offices across the world.

‘Recharge on Goodwin’ will pick up the tab for a week-long break of the employee's choosing, available to any associates who billed 1,950 hours in 2021. The idea is to combine associates desire for a better work-life balance and to encourage people to place value on taking time off work.

The salary war has largely been supercharged by US firms who have arrived in London determined to lure talent from the biggest UK firms.

Professional recruitment firm Robert Walters said earlier this month that graduate lawyers were receiving anything between 15% and 50% salary increases compared to last year amid fierce competition for workers.

The company said there was a shortage of recently qualified lawyers at a time when increasing numbers of experienced practitioners were leaving the sector.

But such salaries may come with high expectations from firms about the time commitments required of junior lawyers, and there continue to be concerns about what the impact might be to their wellbeing.

Lawyers’ charity LawCare said last year that a survey of the profession found the majority (69%) had experienced mental ill health in the previous year. Legal professionals aged between 26 and 35 displayed the highest burnout scores, the lowest autonomy, lowest psychological safety and highest work intensity. More than a quarter of those polled either agreed or strongly agreed that their work required them to be available to clients 24/7 and 65% said they checked emails outside of work hours to keep up with their workload.