Hammonds rejigs lockstep to add performance tests

The decision has been made on the back of advice from consultants at Deloitte & Touche.
Hammonds has incorporated a merit-based element into its lockstep. Previously the firm operated a traditional lockstep, where equity partners moved up the profit-share ladder the longer they stayed with the firm. Last year, the top of equity at Hammonds was £525,000 and the bottom of equity was £175,000. Now two 'gates' and a 'super plateau' have been added to the lockstep.
It takes Hammonds equity partners eight years to get to the top of the plateau of the lockstep. The gates will be placed at year three and year five and progress through them will depend on performance. The super plateau is there for exceptional equity partners.
The firm's managing and senior partners are both plateau partners. Hammonds senior partner Richard Burns said that with the super plateau, some equity partners could take home a larger share of the profits than the management. Partners who have gone beyond five years in the equity will not be reassessed.
A managing partner from another national firm said that Hammonds' super-plateau system would work well for London equity partners who may be billing more than their regional counterparts.
Hammonds is the latest in a line of national firms to alter partners' pay this year. Halliwell Landau is now awarding an additional merit-based payment to partners who get their bills in on time. Addleshaw Booth & Co is using the more punitive measure of withholding 10 per cent of individual partners' monthly drawings if more than 25 per cent of their billings are older than 90 days.