Norton Rose Fulbright to adopt aligned remuneration systems
19 November 2012 | By Joshua Freedman
24 April 2014
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Norton Rose’s UK arm will retain control of partner remuneration decisions for the firm’s Emea offices following next year’s tie-up with America’s Fulbright & Jaworski.
The firm will initially operate separate partner pay systems for the UK LLP, which covers Emea, and the legacy Fulbright side, with decisions about partners’ profit shares taken by distinct committees.
Management of the combined firm now plans to make the two systems more similar to each other despite the regional independence, but the UK firm has already changed its own remuneration structure in recent years to ensure it closely resembles that of Fulbright and its US peers, although CEO Peter Martyr said this was “by happy coincidence”.
Earlier this year the UK firm moved further away from a lockstep by putting more emphasis on performance when allocating profit shares (20 September 2011).
Martyr, who will become CEO of post-merger Norton Rose Fulbright when the deal goes live next June (14 November 2011), said: “We’ve been working on trying to get as close as possible to the same remuneration system [as each other]. We really have everyone now on the same sort of profit distribution and behaviour measures and appraisal process. The aim is to have the same structure.
“It so happens that we had borrowed a number of facets of their remuneration system - just by happy coincidence. We’ve always been good close friends with them. It’s not surprising when I’m trying to move away from a lockstep system to something more akin to what the middle-ground US firms are – it’s a good place to turn to.”
Equity partner pay at Norton Rose is determined by a five-partner remuneration committee. The firm operates a modified lockstep, with partners able to move up or down by a single band every year, with the opportunity to advance by multiple bands every three years.
Partners enter on 100 points and move up by 12.5 each year until reaching a 150-point gateway. The plateau is at 200 points, but some partners can reach 350 – a higher maximum than the 300 in place before this year’s changes. One representative of Norton Rose Australia sits on the UK remuneration committee.
Meanwhile, the firm has confirmed that the Fulbright logo and website will disappear, with all branding for the US firm consumed by Norton Rose’s. London partners of the Texan firm will move into Norton Rose Fulbright’s global headquarters at More London Riverside and become members of the UK LLP. There will be no official City office head.
A similar process will happen elsewhere in most of the Emea network, with Fulbright partners joining the UK-based partnership. There are incomplete plans for a slightly different structure in the Middle East, where there is office duplication in Dubai, but no duplicate offices will remain anywhere in the world.
Meanwhile, Martyr ruled out forced partner exits or staff redundancies as a result of the merger and confirmed that all of Fulbright’s legal and back office staff will be kept on post-merger.
He commented: “It’s actually not that big an office [that Fulbright has in London]. The staff are proportionate in size. If you bring a load of associates in they need to be supported by staff. It seems to be roughly a 1:1 ratio [of lawyers to support staff] for any big firm. It will just be a transfer across. There aren’t that many of them – I think we are talking about 30 lawyers in total. It’s not like we’re taking on 200 people.”
The US and UK parts of the business will keep separate management structures as Fulbright approaches its own change of leadership, with Fulbright chair-elect Ken Stewart becoming managing partner of the US business.
Martyr added: “It’s always been our ambition our a period of time to make sure we have roughly the same subsidiary structures. The Fulbright management structure is not a million miles away from ours.”
Separately, Norton Rose’s Australian, Canadian and South African operations will also take on the US firm’s name, becoming Norton Rose Fulbright Australia, Norton Rose Fulbright Canada and Norton Rose Fulbright South Africa.
The firm has also announced intentions to open in Brazil next year and Mexico City within five years (16 November 2012).