Performance-based extras give non-US firms a way to compete
Several UK law firms have recently revamped their bonus structures, aiming to retain the hardest-working juniors amid tough pay competition.
From this summer, City firm Simmons & Simmons will reward associates who record over 1,800 billable hours with mega bonuses of between 25 per cent and 40 per cent of their salary, according to an internal memo seen by the Financial Times (£). This updated scheme, which sets out the specific amounts up for grabs, replaces the previous “discretionary” bonus structure.
For Simmons’ most junior associates, on salaries of £120,000, these bonuses could range from £30,000 to £48,000. To receive the top end rewards, associates will have to record a whopping 2,100 chargeable hours.
The firm said this refreshed structure is “a central part of our efforts to develop and retain talent … supporting associates across the firm and rewarding them commensurately for their efforts is crucial.”
Simmons isn’t the only firm targeting their generosity towards the most profitable lawyers. Associates at national outfit RPC can now earn bonuses up to an extra 30 per cent of their salary, up from 20 per cent last year.
RPC associates hitting the firm’s target of 1,575 hours a year — at least 1,500 billable hours and up to 75 hours “investment time” — will receive a base-level bonus of five per cent, increasing by one per cent for every 25 additional billable hours recorded.
Managing partner Antony Sassi called this a “more modern, inclusive and sustainable approach to reward — and one we believe reflects the evolving expectations of the next generation of legal talent.”
These targets are for billable hours, meaning time charged to the firm’s clients. Billable hours don’t include time spent in internal meetings, pitching for work, delivering client seminars and other non-chargeable tasks. Billing 2,000 hours a year can often mean working frequent 12-hour (or longer!) days.
Addressing concerns around junior lawyer burnout, Shoosmiths have capped their bonus rewards at 1,900 hours, not wanting to encourage “anyone to work excessive hours chasing a bonus with no cap.” Shoosmiths’ bonus scheme offers up to 19 per cent of salary for associates billing over 1,485 hours.
Meanwhile, Magic Circle player Linklaters is shifting their bonus system away from a focus on billable hours, according to RollOnFriday. From the next financial year, bonus rewards focus more on rewarding associates who excel at generating revenue, cross-selling and those participating enthusiastically in department initiatives
Earlier this year, The Times (£) reported that A&O Shearman used bonuses to encourage office attendance among juniors, threatening to withhold performance related pay from associates who flouted the firm’s three-day-a-week policy and continued to work remotely.
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