Eversheds bins lockstep before age laws kick in” />Eversheds is ditching lockstep entirely in favour of merit-based remuneration as it braces itself for the introduction of age discrimination legislation later this year.
The firm is replacing its modified six-tier lockstep with a scheme based wholly on performance criteria, including fee income generation, profit and strategic value, client service and behaviour.
Eversheds chair Alan Jenkins said: “In business terms lockstep’s something of a straitjacket. What’s important to us is that the scheme is built around our aims and objectives.”
Jenkins told The Lawyer that one of the drivers for scrapping lockstep was the imminent implementation of new age discrimination laws.
“There’s real doubt as to whether lockstep is lawful under that law,” he said. “We wanted a scheme that recognises partners’ contributions. It’s inherent in the scheme that seniority is not a factor any more.”
Jenkins said he was “unaware” of any de-equitisation proposals connected to the new scheme. However, he admitted that the scheme does give room for movement within the equity structure. “It’s inherent in any scheme like this that partners move up and down the bands,” he said.
Remuneration will be decided by the senior management committee, taking account of the aforementioned performance criteria, feedback from associates, partners and clients, and a partner’s standing in the marketplace.
The firm is hoping that the new system will encourage the retention and recruitment of partners.
Jenkins said the firm had been reviewing its remuneration system for a year and that the new proposals will be implemented from the start of the new financial year in May.
Equity partners currently account for around 50 per cent of the partnership, and this is unlikely to change. Remuneration for fixed-share partners, which is based partly on performance and partly on a fixed profit allocation, remains unchanged.