Norton Rose‘s system of guaranteeing partners at the bottom of equity a minimum profit share, known internally as ‘the Floor’, has been used by the firm for the first time in approximately 10 years.
The system, which sees the top equity partners effectively subsidise the bottom tier, is a reflection of the firm’s falling profits, which dipped below £400,000 this year.
The Floor system protects bottom of equity partners’ remuneration from dropping below a certain level – at Norton Rose this year this was £230,000. Once remuner-ation at each level of lockstep has been determined on the profits available in a particular year, the Floor payments – believed to be £30,000 this year – are triggered if the bottom level is below the minimum.
As one source close to the firm explained: “The trigger is simply if profits are down against expectations.”
The Floor has a concertina effect on the equity spread, reducing the top and raising the bottom. This year Norton Rose’s spread was £230,000-£475,000, a drop at the top end of £55,000.
Norton Rose is currently reviewing its lockstep system, and is specifically examining ways of rewarding high-performing partners. The move is seen as vital in order to hang on to the firm’s best-performing partners. One plan being mooted is to allow high-rolling partners to rise two places up the lockstep in one year. A bonus element is also likely to be introduced to the revamped modified lockstep by next year. Partners can already move down the lockstep.
No Norton Rose partners were available for comment.
Dewey Ballantine is taking on its first German lateral following a recommendation from investment bank UBS. Philipp von Ilberg, a capital markets and corporate finance lawyer, is moving to the US firm from Clifford Chance Pünder, which he joined in 1997 before becoming a partner in 2001. Von Ilberg is the firm’s first German hire […]