DLA Piper overhauls remuneration structure in profit drive

DLA Piper has radically changed its partner remuneration structure, introducing a points system based on performance in an attempt to drive profitability.

Under the new structure partners will move through payment bands based on their performance throughout the year. Partners can move up and down the bands but at a slower rate than the previous profit share system.

Global co-CEO Simon Levine said: “When you have a points system you start to focus the business and the partnership on profits, not on turnover or top-line things like billing numbers. What matters is not your top line numbers but your profit.

“The difference with the banded system is you get to a point where people don’t move up and down bands as quickly.”

The firm has also introduced a lockstep system for newly-promoted partners. The lockstep will run for three years with the new partners moving up a band per year.

DLA has also made changes to its bonus structure across its international LLP, which covers Africa, Asia-Pacific, Europe and the Middle East. The bonus pool was originally 5 per cent of the firm’s profit but this will now change to range from 4 per cent to 8 per cent.

The changes to the remuneration structure required 75 per cent of the firm’s partnership to agree to the alterations. By the end of the vote 94 per cent of the partnership approved the changes.

In December Linklaters partners quashed plans to introducing superpoints into the firm’s lockstep system. The decision meant that Linklaters would not follow in the footsteps of Clifford Chance and Freshfields Bruckhaus Deringer to increase its lockstep ladder with the aim of attracting star partner hires.