13 March 2000
How could any legal practice that wants to attract the young, thrusting professionals of the third millennium stick by a reward system which has the words "lock" and "step" at its heart?
What do they suggest to you? Visions of hours behind tightly-locked City doors completing the years necessary to climb each step of a long career ladder before earning a small incremental reward? It's more like Dickens than the 21st century.
In a culture where university leavers would rather take two years off while they try to become overnight internet millionaires than get "locked" into "stepping" up the career ladder, what attraction is there in earning a good (but not a stratospheric) wage for sticking at a place long enough and for being a "reliable pair of hands"?
So, you blithely hear of recruitment partners promising graduates that theirs is a merit-based culture, that trainees who grasp the initiative, are entrepreneurial, develop specialities the firm needs and bring in the clients will be justly rewarded, will reach equity early and will earn merit-based points, overtaking those more senior than them.
But how true are those partners to their word when the crunch comes? Do they risk handing out false hope, all the more crushing when reality comes home to roost? How many UK practices can honestly hold out for having a reward system with no lockstep element in it?
And who would allow those who, for years, have contributed good and steady income as well as client goodwill to the practice, not only to be overtaken, but overshadowed into oblivion by a 28-year-old who, it will be said, might yet have to prove their true worth despite a stunning performance in terms of effort and figures. And if that 28-year-old happened to have one or two good years and then decide they'd had enough, how easy would it be to knock them back down/off the career ladder?
Probably not easy at all unless the whole equity sharing system is radically altered and the City becomes much more input/reward oriented.
However, most of us in the City, probably unlike in New York, still hold out for traditional gentlemanly values. "Once a partner, always a partner" still holds true for many practices, hence the need to create different ranks of partner to cater for different situations. There are salaried partners who are proving their worth before making equity, and those who may remain salaried for longer periods, having status but not sharing profit.
Do we need to keep people happy in this way precisely because we do need differing types of animal in every organisation?
A "safe pairs of hands" for certain jobs and "rainmakers" for others. "We couldn't cope with too many prima donnas" would be a widely held view but a few certainly keep us on our toes. Who said a successful businessman is a large ego with arms and legs sticking out?
A reward system which is largely meritocratic but also allows for the contributions of the differing personalities is the holy grail of many partnership points committees, but that test opens up room for discussion.
Who is the judge? Can one judge who is not being judged? Do they have all the facts to be able to judge? And in whose ridiculous opinion anyway? Where you stand depends on where you sit. How true of partnerships!
Welcome to the world of partnership. That's still a real debate for the 21st century.
Martin Winter is senior partner at Biddle.