Matthew Arnold & Baldwin has scrapped its bonus system this year, choosing instead to focus on remunerating partners through its modified lockstep structure.
Chairman Moira Myers said the firm has paid performance-related bonuses in the past, but as the modified lockstep rewards partners based on their contributions anyway, having a bonus on top seemed pointless.
“We found that it didn’t add anything because we don’t have a lockstep and our remuneration is performance-driven,” she said. “Last year we had a very small bonus; this year we’ll get rid of it. It was meant to give us the opportunity to reward excellent performance, but we decided it was better to focus on getting the profit share right.”
The firm’s modified lockstep operates under three broad bands, with people moving forward meritoriously. In the 2006-07 financial year, lawyers in the bottom band pocketed a profit share of £183,000, while those at the top took home £328,000. The firm’s average profit per equity partner figure stood at £275,000.