has introduced a firmwide discretionary bonus of 15 per cent for all associates and trainees as part of its biannual pay review.
Salaries have been raised by between 12 and 15 per cent for associates at all levels. The review was started long before Allen & Overy‘s (A&O) recent associate pay hikes, but that news was considered as part of the review. Slaughters senior partner Tim Clark said: “Since our May 2006 review the market had moved and we dropped back a bit and didn’t want to be in that position.”
Newly qualified associates’ salaries move up to £60,000 from 1 November. First-year trainee salaries go up from £31,000 to £34,000. Second-year trainees will now receive £38,000, up from last year’s £34,500.
Unlike at most other top 10 City firms, Slaughters’ bonus is not performance-related. Slaughters has no charge- able hours targets. It is discretionary because it is not obligatory, but if the firm awards a bonus, all associates and trainees will receive the full 15 per cent.
Slaughters is the last top 10 City firm to launch an associate bonus scheme. “There are still very good reasons for not paying bonuses, but the world has changed and people accept that bonuses have become part of remuneration structures,” said Clark.
Slaughters’ bonus, however, is less generous than those paid by some of its rivals. Exclusive research by The Lawyer revealed that Linklaters offers the most favourable associate bonuses in the City, as it is the only top 10 City firm that offers both its trainees and associates a performance-related payment of up to 40 per cent, as well as a firmwide bonus.
This compares with Clifford Chance, which only offers 40 per cent bonuses to associates with a minimum of four years’ PQE. Lovells offers all its associates a bonus of up to 30 per cent.
Slaughters executive partner Melvyn Hughes said: “Our total bonus pool is as generous as other firms’ – we’ve just divided it up differently. It’s fairer to pay the same percentage to all our fee-earners – this is consistent with our ‘no targets’ culture.”
A&O surprised its rivals last month when it announced a 15 per cent pay hike for all its London-based trainees and associates and a new performance-related bonus linked explicitly to partner profit.
As first reported by The Lawyer (16 October), senior associates with at least five years’ PQE will in theory be able to earn almost £200,000.
Associate bonuses in London will now be linked to the value of a partner profit point, which last year was worth £24,008. The bonus, which is not linked to profit of a practice group or chargeable hours, will kick in at two years’ PQE.
Slaughters claimed that, because the firm has a shorter partnership track than other firms’ (associates are typically promoted to partner with between six and a half to seven years’ PQE), it does not have to put rewards in place to retain senior associates for longer periods of time while they await promotion.