RPC to scrap NQ flat rate salary for performance-based pay

RPC is to scrap its flat rate salary for newly qualified (NQ) solicitors from September 2014 in favour of a merit based system, arguing that the concept of the flat rate has “passed its sell-by date”.

Currently, only trainees and NQs have a fixed salary at RPC, with those higher up the chain already rewarded through a merit-based system.

“Today’s move is the final step in an ongoing programme of modernisation and is simply about bringing that same reward structure to bear on our NQs,” said  managing partner Jonathan Watmough. “This is not big news within RPC. The current trainees will all raise their eyebrows and say, ‘great, we’ll have some of that’. Everyone else has been on a performance-based system for a long time.”

RPC’s lawyers move through four career levels – trainee, associate level 1, associate level 2 and senior associate – before reaching partnership. The firm operates an all-equity partnership structure.

People move through those levels at their own pace, said Watmough, adding: “Some people move through them very quickly – some lawyers who have reached the senior associate bracket are only four or five years’ PQE – while others may get there at eight years or more. There isn’t any set expectation.

“The idea that people are all the same is completely barmy. When people are all different, why should there be a one-size-fits-all system? It’s completely unfair and doesn’t reward the really high performers.

“The concept of the flat rate has passed its sell-by date and no longer has any integrity. It doesn’t recognise the different merits of individual NQs, nor does it recognise the market variances between the different branches of law into which they will qualify. Crucially, it does not take into account the pressures clients are under to obtain value from their suppliers.”

Jonathan Watmough RPC

RPC’s London NQs are currently paid £58,000 per year upon qualification, while their counterparts in Bristol earn £44,000.

The new base rate for a London NQ will be lower than that £58,000 mark, although “not appreciably lower,” according to Watmough. “The strongest NQs, entering their careers in the most competitive areas of the profession, will be eligible to earn salaries above those currently offered by the major City firms.”

The magic circle firms currently offer between £63,000 and £65,000 to their NQs, and the upper end of the pay bracket for RPC’s junior lawyers will be “there or thereabouts,” Watmough added.

According to Watmough, the benchmarking exercise that took place against the last two years of the firm’s newly qualified solicitors suggested that it would have paid out more in salary under the merit-based system. “If we were doing this as a way to save money it wouldn’t save very much: I wouldn’t put our employee brand at risk for that,” he said. 

“This move isn’t motivated by cost-cutting. It just makes sense to us to reflect the merit-based approach in the rest of the firm – which is, after all, that used by most of our clients.

“More than ever, these days we live in a value economy, and we need to be able to demonstrate to our clients that we are offering them good value for money from all of our lawyers.”