Richards Butler will introduce a new merit-based calculation into equity partners’ remuneration once its merger with US firm Reed Smith goes live on 1 January.
For the first time UK-based partners will receive credit for introducing business to another department in the firm from next year.
Partners at Reed Smith already receive credit in this way, so the move is both an attempt to encourage cross-selling and a significant shift to bring the UK’s profit-sharing system more into line with that in the US.
Richards Butler managing partner Roger Parker revealed the initiative at a recent conference on management hosted by The Lawyer.
Parker said it had been immediately apparent, once merger discussions between the two firms began, that there were many similarities between both firms’ performance-related remuneration systems.
However, Richards Butler’s partners had been particularly impressed by one item, he added, which was the concept of rewarding partners for cross-selling.
“We’ll introduce a new system whereby partner X will get rewarded for introducing business to partner Y, even if X has nothing to do with the file,” explained Parker.
Richards Butler is currently moving from an acccruals-based remuneration system to cash-based accounting, in line with Reed Smith.