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Firm applies new criteria after no one gets a penny from 2008-09’s budget-linked payouts
Simmons & Simmons is overhauling the non-equity partner bonus scheme it introduced at the beginning of the 2008-09 financial year after not one person was paid under the arrangement.
The firm has put in place a new package for London-based partners that will assess individual performances over five different areas. It is also linked directly to the office’s performance. The firm’s 98 salaried partners did not receive bonuses under the previous scheme because it was dependent on the firm hitting budget. Last year turnover grew slightly, from £289m to £291m, but the profit per equity partner figure fell by 20 per cent.
Head of HR John Lucy said: “We didn’t pay out any bonus under that scheme. There was a profit target that had to be reduced to trigger the payout - if this wasn’t reached, payments were not forthcoming. It was designed in early 2008 before Lehman Brothers collapsed, and the figures would have been difficult to achieve last year.
“Having looked at that and understood that the trigger wasn’t reached, we decided to have a sliding scale, then looked to simplify the criteria we want to apply.”
Under the new arrangement bonuses will continue to be linked to the budget, but salaried partners are eligible so long as 50 per cent of budget is reached.
The firm has also simplified the criteria by which it assesses individual performance. Non-equity partners will now be evaluated on the basis of billable hours, managed fees, revenue generation, client and business development and lock-up management. Areas are weighted accordingly, with revenue generation twice as important as billable hours. There is also potential for contributions to corporate responsibility to be included.
Managing partner Mark Dawkins said: “Regardless of the financial crisis, we still need to reward and retain staff in a competitive market.”
Lucy admitted that the previous bonus plan had not been implemented by offices abroad.
“It was the original intention to roll it out globally,” he said, “but some local offices decided to stick retain arrangements that were working effectively.”
In addition, for the first time associate bonuses will be linked to overall firm performance, while Simmons’ management committee will discuss proposals to evaluate associates on criteria other than billable hours.