Edge Ellison has moved away from lockstep by introducing incentive-based pay for equity partners.
The complex system of assessment seeks to reward both ability and performance, says new managing partner Simon Ramshaw.
He describes the new system as scientific, rigorous and exacting.
“A percentage of partners' remuneration will be determined by performance in the year ahead,” he says.
Ramshaw will not say what percentage of partners' pay is performance-related, but admits it is “a substantial double-figure percentage”.
Partners set targets for themselves in consultation with their department heads and are given “basis points”, which “reflect a partner's individual powers”, says Ramshaw.
Partners, with their heads of department, measure themselves against a model of things the perfect partner should be doing, including research and development, team building and marketing skills.
Partners are then given targets “which are tied into the strategy of the department and the firm as a whole”, says Ramshaw.
At the end of the financial year, partners and their department heads assess how well the partner has used his abilities.
“The basis points reflect a partner's ability and performance remuneration reflects how those abilities have been applied over the year,” says Ramshaw.
Ramshaw says of the old system: “It reflected responsibilities, but it wasn't scientifically assessed.”
Ramshaw says that partners have welcomed the scheme, which “gives an early warning if things are going wrong and provides encouragement when things are going right”.
At the moment, the new system only applies to equity partners, but Ramshaw says the firm intends to apply it to all partners.