Lovells partners have shunned plans to make further changes to the firm’s partner remuneration system designed to reward exceptional performers.
After taking soundings from partners, Lovells’ partnership council has decided against recommending radical changes to the firm’s lockstep. Instead it plans to put forward just one proposal, which will allow lateral hires to have their equity points reviewed within two years of joining the firm.
The most controversial management recommendation, which has now been ditched, was to give the US practice flexibility to pay, in exceptional circumstances, both existing and lateral hires outside the range permitted by Lovells’ lockstep. Other ideas, which have now also been ruled out included the introduction of a bonus.
Senior partner John Young, who has been leading the review, told The Lawyer: “Lockstep is a very fragile system. And there was serious concern that by changing it the general level of cooperation would be compromised.”
Lovells is, however, pressing ahead with plans to increase the entry level for new equity partners from 24 to 30 points and will be giving extra points to those partners who joined the ladder at the lower level retrospectively from 1 May 2006. This will enable partners’ profit share to be adjusted for the current financial year.
Lovells radically overhauled its remuneration at the start of 2006, which gave the firm powers to move underperforming partners down the equity ladder or to freeze them on certain points, with the agreement of the partners concerned.
Young said that the lockstep review, which has spanned well over a year, is now at the final furlong. “I’ve undertaken to partners that we will not be opening this debate up again in the future,” added Young.