Linklaters to introduce merit element to associate lockstep

Linklaters is to introduce a merit-based element to its associate lockstep structure in an effort to “reward high performance as well as chargeable work” after lifting a junior lawyer pay freeze earlier in the year.

London-based associates above two years PQE will for the first time receive a discretionary element understood to start at around ten per cent of pay from next May, the beginning of the firm’s new financial year. 

Currently, London associates are remunerated on a strict ladder according to PQE and are rewarded a bonus at the end of the year, which is mainly determined by chargeable hours. Those above two years PQE will continue to receive a base salary but also take home a chunk decided according to performance-based criteria.

According to insiders, junior lawyers will continue to receive a bonus that is based predominantly on billable hours, but because the bonus did not always tally with best performance, the firm has introduced a merit-based element.

The performance-based pay will be based on competency criteria already used at the firm, broken into five competency categories including technical ability, business management, client care and team work. Those are then broken into futher categories and associates receive a score which will partly determine their take-home pay.

The move follows a salary review by Linklaters partner Michael Bennett. He said: “Feedback from associates indicates they would like to see individual performance playing a greater role in overall remuneration. The changes we are proposing will help address this and reflect the firm’s commitment to offer our people the most attractive overall package.”

The news comes after Linklaters hiked pay for all junior lawyers in May 2013 – when newly qualified lawyers (NQs) receiving their first salary boost since 2011 (7 May 2013). NQ’s received a salary boost of 4 per cent from £61,500 to £64,000 while one year PQE salaries jumped a modest 0.7 per cent to £69,500 from £69,000.

The rise marked the first year of pay rises after two years of pay freezes for junior lawyers at the firm.

The current change follows the firm’s ‘Our Deal’ campaign and aims to ”ensure salaries better reflect individuals’ contributions”.

Several firms have moved to overhaul associate pay in recent months with RPC confirming plans to scrap flat-rate NQ salaries in favour of a merit-based system last month (19 November 2013).

The magic circle has been less radically minded, though Freshfields moved to a merit-based system for its junior lawyers in 2011 (26 September 2011) and Slaughter and May abandoned its rigid associate lockstep in January 2013 (17 January 2013).