Global Markets-14 July 2008
As U.K. Firm Overhauls Lockstep Compensation, Top Partners Face Shifting Landscape
About 75 of Ashurst's most senior partners will see their position at the top of the lockstep come under intense scrutiny as part of a radical overhaul of the London firm's remuneration system.
The 132-equity partner law firm is re-basing its entire lockstep from the current 20-50 point ladder to a slightly wider 25- to 65-point scale with partners at or near the top subject to the most far-reaching changes.
Senior partners at the firm will be judged on their overall contributions and be split into four different tiers, between 45 points and 65 points. This will give Ashurst the opportunity to better reward star performers while reducing the pay of other current plateau partners.
The new model will maintain two "gateways," which partners pass only on a discretionary basis.
It is thought that the approximately 75 partners who fall within the 41- to 50-point range will all be subject to stringent reviews in the next partner appraisal round, which will be carried out by practice group heads and senior partner Geoffrey Green.
Reviews of all partners are expected to start over the next couple of months, with partners learning their new positions around April next year -- although remuneration will be backdated for the current financial year.
The firm has also shortened its lockstep from 10 years to nine. Younger partners could see their progress through the lockstep accelerated.
The changes were agreed through a written resolution requiring approval from 75 percent of the partnership. Despite the approval the structure has received mixed reviews.
One partner told Legal Week: "It is a mammoth task and it will be a tall order to do it properly. A lot of people have grown up together here and they will end up in different places on the new ladder, which could be divisive in the short term."
Green defended the move saying: "The driving force is to introduce some measure of differentiation between those in the top rung and to take a year out of the system so younger partners can see themselves moving. We want as many partners as possible to get to the highest level if they deserve it."
He added: "Overall, there is an understanding of why we believe it is appropriate to do this. A lot of people are positive, but some are nervous and we respect that."