Addleshaw Goddard is exploring how to better reward star partners for their contributions in a bid to better drive and recognise individual performance, the firm’s managing partner Andrew Johnston (pictured) told Legal Business.
Johnston said the firm needs to be better prepared to ‘disproportionately recognise and reward’ those partners who are outperforming and increase compensation accordingly.
Possible changes being explored include enhancing bonuses for high achievers, with Johnston also keen to increase transparency around pay and performance across the partnership more broadly.
The firm is not planning to make any changes to its standard partner remuneration structure, which Johnston described as a ‘modified lockstep with movement up and down based on performance’.
A key part of any plans will be measuring and tracking performance in order to better reward those that outperform.
‘We’re not going to become a firm with a formulaic, spreadsheet-based compensation system. But equally, understanding where partner performance lies is important,’ Johnston told LB. ‘We’re going to get crisper in terms of understanding and analysing how the business is performing and how we share that data.’
‘We want to continue to incentivize and drive that collaborative culture across the business but, at the same time, we want people to be in the market, taking more market share and being really focused on driving client revenue,’ he added.
One former partner said that the firm’s partner bonuses were generally awarded in increments of five equity points, rising to 20. The person suggested increasing the flexibility and transparency of this system would be one way to better reward performance.
When Johnston took over as managing partner in May 2024 the firm’s profit per equity partner stood at £984,000, with revenue at £496m. At his first partner conference he set out targets to double revenue to £1bn by 2030.
Johnston succeeded John Joyce who led the firm for a decade from 2014 during which time he shored up the firm’s financials, taking Addleshaws from a cash deficit to more than healthy reserves of £146m by the end of the 22/23 financial year.
In the last 10 years, Addleshaw’s revenue has increased 186% from £192.5m to £550.9m, a trajectory that Johnston wants to build on.
One key metric Johnston has singled out as needing improvement is the firm’s revenue per lawyer figure which is currently £345,000.
‘It’s certainly trending upwards and we are much happier with the direction,’ he said, ‘but that speaks to the fact there is more to do around performance.’
