King & Wood Mallesons harmonises Hong Kong pay as it gears up for SJB integration

King & Wood Mallesons’ (KWM) Hong Kong office, the only fully financially-integrated arm of the two legacy firms, has moved to a unified human resources framework, including a single employee renumeration system.

The move comes 15 months after the merger between King & Wood and Mallesons Stephen Jaques on 1 March 2012 (15 December 2011).

The HR aspect of the integration was jointly led by Hong Kong-based corporate partners Hayden Flinn and Candy Chan. The review and policymaking team formed a new framework after having reviewed over 40 material and many immaterial issues, such as relocation policy, overtime pay, insurance plans, training programs, performance review and pay review processes.

“It took time to move the merged office to a fully integrated system, as we set out the aim to creating a new firm and a new system that’s right for the market and people rather than adopting one legacy system,” said Flinn. “The introduction of the new policies is also a gradual process instead of one big bang.”

Flinn added that the biggest challenge of the lengthy process was the “sheer volume of items and issues” the firm had to look at. It is understood that the firm started rolling out the new policies at the begining of this year.

One of the most significant aspects of the HR overhaul is the implementation of a unified renumeration system for all lawyers and staff employed by the Hong Kong office. The Hong Kong office formally transferred to the new system on 1 July this year.

Under the new system, all associates’ renumeration will be based on their post-qualification experience (PQE) on a lockstep with a merit-basis element. There are several bandings, with each setting out a range of salary levels. Associates will progress naturally to the next banding according to their PQE, and their pay will increase incrementally. However, renumeration for associates in the same banding can vary within the set range based on individual performance review.

New performance and pay review period will be the 12 months ending 30 June, the same as legacy King & Wood Hong Kong office’s review period. Previously, legacy Mallesons ran its review period between 1 April and 31 March each year.

According to Flinn, criteria for performance review not only include billable hours targets, but also include non-financial contributions, such as contribution to client pitches and training junior lawyers. The new system also introduced a unified bonus scheme for all lawyers and staff.

“The new system is similar to that of other leading international firms rather than either of the legacy firms,” said David Bateson, partner in charge of KWM Hong Kong office. “It was a relatively easy integration given the size of the Hong Kong arm and it was the only place where both operations are fully financially merged. We’ve been concentrating on creating a single unified structure since the merger.”

According to Bateson, the firm plans to fully integrate SJ Berwin’s Hong Kong team as soon as possible after the regulatory approval, which could be even before 1 November. SJ Berwin’s Hong Kong office currently has four partners and five associates.

KWM and SJ Berwin recently voted through their merger, which will go live on 1 November (31 July 2013). The combination will see SJ Berwin becoming the fourth arm of KWM’ existing Swiss Verein, which already consists of financially independent arms in China, Hong Kong and Australia.

In Hong Kong and China, SJ Berwin will move into KWM offices, while in London, KWM lawyers will move into SJ Berwin’s existing premises.