Ashurst is set to overhaul its lockstep with the City law firm in the midst of a comprehensive review that could see it boost junior partners’ drawings and reward star performers at the top of the equity.
A formal consultation paper has been sent to partners and the process is expected to conclude in autumn.
Proposals are understood to centre on ‘re-basing’ the entire lockstep, which currently runs from 20 to 50 points over 10 years with two gateways at four and seven years.
Increasing the number of points at the bottom of the ladder would allow the firm to provide better incentives to fixed-share partners — who have no guarantee of making the equity.
In addition, partners at the firm have told Legal Week that Ashurst is considering ways to reward top performers, which could take the form of a band of ‘super points’ above the current lockstep.
The idea could be seen as controversial within the firm as Ashurst introduced powers to reward star performers with a bonus in 2004 but the concept proved unpopular and has never been used. Similarly, disagreements over ‘super points’ played a large part in the breakdown of merger talks with New York’s Fried Frank Harris Shriver & Jacobson in 2003.
However, senior lawyers at the firm this week welcomed the main thrust of the consultation. One partner commented: “It is a wholesale review of the lockstep and it will have my support.”
Other issues thought to be covered in the consultation include bringing more gateways in the lockstep as a means of managing partner performance. The firm already has the power to hold partners or move them down at the gateways.
Senior partner Geoffrey Green told Legal Week: “This review is being driven by the management board — not by star performers. It is right that what is a formal lockstep should be reviewed as a matter of policy. Remuneration structures have to adapt as the demographics of a lockstep partnership change.”
He added: “We wanted to engage and reward younger partners and people coming into the partnership.”
The top 10 City firm this year announced a 36% surge in profits per equity partner to almost £1m.