New York law firm Cravath, Swaine & Moore LLP is raising base salaries for its junior-most lawyers by 12.5%, its first increase in nearly a decade and a move likely to trigger a wave of similar hikes throughout the legal industry.

As of July 1, new first-year lawyers at the firm will now get $180,000, up from its longtime standard of $160,000 for law-school graduates, according to a Cravath memo reviewed by The Wall Street Journal. The increase lifts pay from there: fourth-year lawyers, for instance, will make $235,000,...