Addleshaw Goddard’s top of equity has soared 67 per cent, from £560,000 to £936,000, after strong results gave the firm more freedom to reward its partners.
The firm’s equity spread last year ranged from £246,000 to £936,000. In the 2013/14 financial year it ranged between £220,000 to £560,000.
The rise is due in part to the firm’s increased profitability during the 2014/15 financial year. Last year the firm saw revenue increase by 12 per cent from 171.4m to £192.5m, while net profit increased from £39.8m to £45m.
However, the firm has also made better use of its bonus remuneration system and issued a higher number of bonus equity points than in previous years. These bonus points are issued in line with partner performance rather than seniority.
Addleshaws managing partner John Joyce said: “We improved profitability a lot last year and we also reshaped our approach to remuneration in the sense of deliberately setting out to want to reward better the highest performing people.
“Our remuneration system has been quite flexible but we’ve never been very flexible in the way we’ve approached it.”
John added that Addleshaws’ past performance had often meant that the firm had not made the best use of its remuneration structure. In order to rectify this the firm built in a significant performance element of the structure.
Addleshaws is also set to distribute a firmwide bonus later this year, the figure for which has yet to be decided.
Despite the increased focus on performance the firm’s lockstep structure has not changed. In 2011 Addleshaws’ management team scrapped a planned partnership vote to change its lockstep from a partial lockstep system to a more merit based one. The vote was pulled from the agenda of a partnership meeting following complaints from regional partners.