Usually it pays to be nimble. And at the top law firms, increasingly, the more nimble they are the more their best partners get paid.
This is not only important for partners, it’s also critical for management. In a mobile market your stars will walk if their remuneration fails to match their contribution. And lockstep looks an increasingly outmoded method of ensuring the two are in line.
The confirmation last week that Norton Rose is overhauling its lockstep to put more emphasis on individual partner performance underlines this.
As the firm’s group chief executive Peter Martyr says, the move is aimed at introducing “greater flexibility” when assessing a partner’s performance and allocating rewards.
imilar changes are taking place across the market. Take today’s story on Charles Russell. The firm is re-engineering its seven-step lockstep to include a performance-related element for the first time. Chairman Michael Scott confirms that the primary driver is to enhance the firm’s ability to recruit and retain top talent.
Norton Rose’s reasons for taking a hammer to its equity ladder are similar, although ramping up its spread at the top from 300 to 350 points is more likely to be about increasing its attractiveness to a US suitor than wooing new blood.
Either way, in both cases, and at a growing number of firms, the key word is flexibility. Indeed, this theme was reflected in this year’s The Lawyer UK 200 Annual Report partnership survey, which asked partners to rate how satisfied they were that their remuneration reflected their contribution.
As one partner puts it: “The old law firm model is broken – there are too many people who take home too much at the top.”
Disaffection leads to disappearance, which means partner remuneration should now be an embedded part of a firm’s strategic thinking.
Consequently, this talent management issue is one of the themes highlighted by The Lawyer’s relaunched Workplace and Diversity Awards (formerly our HR Awards).
It’s where thought leadership meets partner engagement. Get it right and you’re smiling; get it wrong and you’re Howrey.