Two major Wall Street firms – including one of New York’s long-established “white shoe” names – have set the pace with year-end bonuses of $149,500 (£114,000) for top-tier associates in London.

A memo circulated to lawyers at Fried Frank this week confirmed that, on top of the standard year-end payment, some associates may also qualify for a “special bonus” of $25,000, potentially lifting the combined payout to around £133,000.

Fried Frank’s announcement closely followed reporting by Above the Law that Cravath – founded in 1819 – would issue $140,000 year-end bonuses to associates across New York, Washington and London.

By contrast, senior associates at magic circle firms and other top-ten UK practices typically receive no more than £45,000 in year-end bonuses, underscoring the widening gulf between British and US firms operating in the same market.

According to the Fried Frank memo, seen by The Times, only associates logging at least 1,850 billable hours will qualify for the awards.

Magic Circle firms are expected to hold down bonuses for junior lawyers to ensure that senior associates – whose pay bands are increasingly compressed by the surge in newly qualified salaries – retain meaningful financial headroom. Some US firms now pay NQs up to £180,000, forcing London competitors to stretch to around £150,000.