Slaughters ditches associate lockstep in favour of merit-based system

The firm will now issue a higher remuneration level to associates with at least four and a half years’ post-qualification experience (PQE) who show outstanding performance as part of a revamped appraisal system.

Associates will for the first time be awarded points based on four criteria: legal knowledge and skills; business and communications skills; practice management skills and people skills; and personal development.

They will then be graded ‘good’ or ‘exceptional’, coded internally as ‘G’ or ‘E’, and paid accordingly.

The new system, effective from May this year, mirrors the firm’s so-called ‘associate development path’ and follows feedback from associates who recommended a more merit-based pay arrangement.

It will kick off with this spring’s appraisals, which are scheduled for March or April. It will not apply to lawyers with less than four and a half years’ PQE, who will remain on the current lockstep and receive remuneration based purely on experience.

Up until now the firm has not differentiated at all when paying associates, operating a pure lockstep at all levels above trainees. Even bonuses are on a firmwide basis, with all associates receiving the same percentage uplift.

Slaughters executive partner Graham White said in a statement: “This decision reflects feedback we’ve received from associates recently as well as a shift in partners’ thinking over the last year or so. It’s not linked in any way to the economic environment. The new system will aim to recognise the outstanding performers in any generation but is based on the premise that everyone here is a first-rate lawyer. 

“The feedback from associates showed that, for many of them, an element of merit-based reward, and the incentivisation that would follow, would be welcome. We believe that this approach will enable us to recognise the contribution made by associates as they assume more responsibility as their career progresses.

“It is important to note that we will not be moving to an hours or billing targets culture. Having no hourly or billing targets is a fundamental distinguishing feature of the firm. It is clear to us that targets are not favoured by our clients and that they ratchet up anxiety, and we believe that the absence of targets removes an important level of additional stress and elements of internal competition.”

The news follows similar switches away from associate lockstep by firms including Freshfields Bruckhaus Deringer and SJ Berwin. Travers Smith also recently considered rethinking its associate lockstep.

Last year Slaughters scrapped its six-monthly pay review in favour of an annual one.