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Radical shift to merit-based pay structure as management looks outwards to Europe
Eversheds is voting on a new system of profit sharing that will move the firm dramatically away from the present lockstep system. The new setup will make the merit-based element in excess of 30 per cent of the balance after fixed-share and bonus elements have been allocated. At the moment there is a lockstep system with an additional bonus scheme; however, under the new proposals, there will be four elements to profit sharing. All partners will receive a fixed share in excess of £100,000. The balance will then be divided between a lockstep, a merit-based element and a bonus pool. It had always been intended that Eversheds should move towards a more meritocratic system. A source close to the firm, however, claims that the merit-based element is larger than expected. Eversheds national head of operations Colin Brown, who was chairing the committee on profit sharing, said that the changes are in response to developments in the marketplace. He said: "We have to introduce a scheme which is capable of tackling the challenges we face and of managing the expansion of our pan-European business. "We have a brave and forward-thinking partnership that has shown a preparedness to accept this sort of change, which is always difficult when mov-ing away from a culture of equality and lockstep." National managing partner David Ansbro said: "When we integrated two years ago, we recognised that we needed an interim structure, and now we've agreed on a new system." Before full integration, the firm's regional offices were only sharing profits of up to 10 per cent, but from 1 May 2000 the firm started sharing profits equally. Profitability became a key issue for the partnership in the last financial year and in January the firm decided to move 20 partners out of equity; 10 dropped down to fixed-share status while the others were asked to retire or to move elsewhere. Partners are voting by post and the results are expected at the end of next week. And if the vote should be successful, the changes will be implemented on 1 May 2002.