SJ Berwin associates in line for giant bonus

SJ Berwin has overhauled its pay structure, handing its associates bonuses of up to 75 per cent of base salary.

The increase means that a two-year PQE associate earning £66,000 could be eligible for a bonus of up to £49,500, boosting their total earni…


SJ Berwin has trumped Allen & Overy’s market-shaking associate salary shake-up, overhauling its own bonus structure to hand associates bonuses of up to 75 per cent of base salary.

The new structure, the highest in the City, means that a two-year PQE associate with a base salary of £66,000 could be eligible for a bonus of up to £49,500, boosting their total earnings potential to £115,500.

Three-year PQE associates earning £74,000 could pocket up to £55,000 in bonuses, bringing their total earnings to £129,000.

In an internal announcement this morning (24 November), the silver circle firm confirmed that it had replaced its previous solely utilisation-based bonus system with a new structure recognizing both chargeable hours and non-chargeable contribution to the firm. The system is to be backdated to 1 May 2006.

The announcement is in direct contrast with A&O’s new bonus structure, announced in October, which is linked to the value of partner profit points and will not be paid out until July 2008.

SJ Berwin managing partner Ralph Cohen told The Lawyer that maximum payment for the chargeable hour element of the bonus had been increased from 27.5 per cent of base salary to 60 per cent.

Associates will also now be eligible for a further 12.5 per cent bonus based on their non-chargeable contributions to the firm, and the firm’s existing 2.5 per cent firmwide bonus linked to SJ Berwin hitting its revenue targets.

Cohen said that the non-chargeable element had been added to reward “exceptional contributions” in areas such as client development, training, research and development. “It is for something that is over and above what we would expect of our associates.”

He said that the new system would be backdated until 1 May 2006 and that the bonuses would be paid from 1 May 2007. Payments will be made in two installments, split over the following six months.

Cohen said the SJ Berwin would also consider increasing associates’ base salaries in May 2007, depending on movement in the market. “We remain committed to our salaries being level with the magic circle.”

Under the new bonus system, the chargeable hour-related element is divided into three bands. Associates will receive 2.5 per cent of base salary for meeting the firm’s 1,750 billable hour target, after which they will receive a further 0.5 per cent for each further 1 per cent utilisation up to 1,900 hours.

This will then increase to 1 per cent of base salary for every further 1 per cent utilisation up to 2,125 hours, when it increases again to 1.5 per cent of base salary, up to a maximum of 60 per cent.