Junior lawyers at Reed Smith will be awarded a significant bonus increase if they manage to bill about 2,000 hours every year, following a review of the firm’s compensation system.
The youngest ranks of Reed Smith’s workforce are in line to get a bonus of £25,000 if they hit the 2,000 hour mark. The raise comes as the firm introduces a new tiered bonus system that also sees mid-level associates potentially netting £40,000, and more senior lawyers getting £60,000 if they manage to rack up the time required.
The bonus comes alongside further salary spikes. In particular, NQs and junior associates will pick up between £90,000 and £100,000 as opposed to the previous £70,000-£88,000.
Qualified lawyers with experience spanning two to six years will be given between £95,000 to £125,000; by contrast, senior associates will get the same amount of money as before, about £110,000 upwards.
However, the change in its reward system goes hand in hand with an increase in targets for billable hours, which have also been upped from 1,650 to 1,700. These include metrics going beyond client work, such as the firm’s innovation hours initiative, which gives lawyers the opportunity of spending 50 hours working on technology and innovation projects.
A Reed Smith spokesperson said in a statement: “I can confirm that we are increasing our salary bands and bonus plan to remain competitive with the market and to enable us to continue to attract and retain the top talent that is a hallmark of the firm.
He added: “The changes allow us to continue to invest in talent at all levels.”
The review follows a similar exercise carried out in 2017, when the firm raised its salaries for trainees and associates.
At the time, the US firm boosted first-year trainee pay by 4 per cent to £40,000, cancelling out a pay discrepancy that previously existed, where the three trainees it rescued from the collapsing King & Wood Mallesons were being paid more than the rest of the cohort.
King & Wood Mallesons had a starting trainee salary of £40,000, rising to £44,000 in the second year. Reed Smith’s starting trainee salary was £38,500, rising to £40,000 in the second year.
The news was first reported on RollonFriday.