With its City rivals increasingly breaking their remuneration models for star hires, King & Wood Mallesons (KWM) has created a firm-wide remuneration pot to fund marquee hires across the world.
Intent on rebuilding its corporate department in London following a string of big-billing partner exits, the move will allow KWM to at least double the amount of money it can currently offer incoming partners and pay over £2m for top names.
Created in February by central management, the ‘global partner’ concept has yet to be used but is expected to be deployed as the firm seeks to hire new leaders for its City corporate team. The scheme, introduced without the need for a partnership vote, has no limit in terms of pay but will only be available to incoming partners.
While a limit has been initially placed on the number of so-called global partners that can be hired into any of KWM’s 30 offices, the move means the firm can pay more than double the top of its modified lockstep in London and the cap is expected to lift over time.
‘We wanted to ease into it,’ said global managing partner at KWM, Stuart Fuller (pictured), ‘so it has an initial maximum of people, and we did that so we can use it where we need to but give the partners comfort that we would phase into it. Partner remuneration is one of the most sensitive things that a law firm alters so we wanted to make sure people knew it would be used for a particular purpose.’
Currently, the Europe and Middle East member of the verein firm, stemming from legacy SJ Berwin, employs a 20-60 points ladder with a large performance-based element on top. In recent years the highest earners in London topped out at around £1m, with profit per equity partner rising nearly 40% last year from £440,000 in 2013/14 to £610,000.
Fuller added: ‘This gives us the flexibility to compete. Where it’s a global firm priority about recruitment and the compensation is higher than the top of our lockstep the global partner concept in KWM allows the firm to meet the market. The global firm is saying “this is how we want to play and we want to have the top talent”. It is deliberately very flexible.’