Beachcroft has radically revamped its remuneration system to better reward partners’ performances, as it undergoes a cultural shift following its conversion to limited-liability partnership (LLP) status.
The firm has ditched its simple modified lockstep in favour of multi-tiered remuneration for equity partners, which takes into account performance as well as seniority.
Under the new system, equity partners will all be paid a base salary. On top of that, they will receive a return on the capital they have invested in the business; London weighting (if appropriate); a share of the profit allocated on a lockstep basis; and a share of 10 per cent of the firm’s total profit, allocated through merit.
Managing partner Paul Murray said: “The bit on top will be able to be distributed in a way that enables more people to get a broader spread of profit. What you put in is what you get out.”
The new system will come into effect at the end of the current financial year and is a major step away from the firm’s previous modified lockstep. Under that system, equity partners entered on 50 points and progressed up the lockstep by 10 points annually, although there was also an element of merit-based remuneration.
Murray said the firm’s conversion to LLP status was the ideal time to revamp the system. He added: “I was surprised and very pleased about how realistic our partners were in accepting the changes.”
The revamp comes as Beachcroft celebrates a 10 per cent turnover rise to £98.7m. Murray said the firm would continue to work on integrating its core litigation activity with increased work in non-contentious and regulatory areas.