LLP latest: Shoosmiths, Morgan Cole and MMS see significant drop in highest paid partner as Charles Russell’s takes home 64% more

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The latest round of LLP accounts for 2012/13 has revealed that Shoosmiths paid £1.5m to acquire Scottish firm Archibald Campbell & Harley, while Morgan Cole’s highest paid partner took home £116,000 less, Maclay Murray & Spens reduced their borrowing despite a tough year and Charles Russell’s highest paid equity partner took home £234,000 more.

On merging with Archibald Campbell in October 2012, Shoosmiths acquired £1.77m of net assets, £1.47m of which was paid as a cash consideration, the UK top 45 firm’s first-ever LLP accounts show. The remaining £300,000 was collected by the end of the financial year. Continue reading “LLP latest: Shoosmiths, Morgan Cole and MMS see significant drop in highest paid partner as Charles Russell’s takes home 64% more”

US bonus season: Boies Schiller, Cahill Gordon and Sidley among leading US firms to unveil numbers

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Since New York elite firm Cravath, Swaine & Moore kicked off the US bonus season at the start of December with its decision to hold bonus rates at 2012 levels, firms including Boies, Schiller & Flexner, Cahill Gordon & Reindel, Sidley Austin, as well as Kaye Scholer, Schulte Roth & Zabel and Ropes & Gray have unveiled how they measure up to the traditional market benchmarker.

Where Cravath’s associates are paid from $10,000 (the class of 2013) up to $60,000 (the class of 2005), Boies, Schiller is unusual in awarding significantly more, with the best-rewarded associates receiving $300,000 compared with a maximum bonus of $250,000 paid in 2012. The average young lawyer at the litigation-driven firm will take home a bonus of $85,000. Continue reading “US bonus season: Boies Schiller, Cahill Gordon and Sidley among leading US firms to unveil numbers”

LLPs face hike in tax bills as legislative changes target salaried partners

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Limited liability partnerships (LLPs) are facing significantly increased tax bills after HM Revenue & Customs (HMRC) issued draft legislation this week confirming that salaried partners with little or no share in the equity will be classed as employees for tax purposes.

The draft Finance Bill, which will come into effect in April next year, says that partners with less than 20% of their remuneration linked to the profits of the firm will be regarded as having a ‘disguised salary’ and subject to both income tax and national insurance.

Continue reading “LLPs face hike in tax bills as legislative changes target salaried partners”

A carve-out before Christmas – HSF agrees compromise to (largely) unite post-merger partner pay

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It was a long time coming but Herbert Smith Freehills (HSF) has finally agreed a compromise to unite equity partner pay just over a year after the union of Herbert Smith and Australian leader Freehills.

The deal will see the two firms combine their partnerships under a ‘global managed lockstep’, a break from previous attempts to usher in more radical performance-based rewards for the combined partnership.

As Legal Business reported three weeks ago, the firm has decided to allow legacy Freehills some latitude when it comes to how they pay their partners.

Continue reading “A carve-out before Christmas – HSF agrees compromise to (largely) unite post-merger partner pay”

More for most or less for some? Links is latest top firm to sidle towards merit pay

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Even at the top of the market, the slow march towards performance-driven pay for associates continues with Linklaters this week becoming the second top City player to unveil changes to its associate remuneration.

Linklaters is to introduce a performance-based element to salaries for its London-based associates with two years or more post-qualification experience (PQE) as part of what it dubs its ‘Our Deal’ strategy.

The City firm issued a somewhat obtuse statement over the move but the new model, which kicks in from 1 May 2014, is expected to see roughly 10% of pay handed out on the basis of individual merit past the two-year PQE point. An existing bonus scheme remains unchanged.

Continue reading “More for most or less for some? Links is latest top firm to sidle towards merit pay”

RPC abolishes flat-rate salary for newly-qualified solicitors

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City firm to move junior lawyers to structure based on merit and market rates.

RPC has taken the final steps to adopting an entirely merit-driven pay model as it last month announced that it will abolish the traditional flat-rate salary for newly-qualified solicitors (NQs) in the UK and move to a system linked to merit and market rates from September 2014.

In a move said to take into account what is happening in other sectors and the pressures that clients are under to achieve value, the firm will operate a variable pay scale where 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 major City firms, a firm statement said. Continue reading “RPC abolishes flat-rate salary for newly-qualified solicitors”

US bonus season: Cravath kicks off by holding bonuses at 2012 levels

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The US bonus season has kick-started with elite New York firm Cravath, Swaine & Moore setting the tone by revealing it will pay its associates the same end-of-year bonuses as 2012, ranging from $10,000 to $60,000.

Lawyers who joined Cravath in September this year will receive a $10,000 bonus on Friday 20 December, identical to last year’s sum. First-year associates will also receive $10,000 while the most senior associates will receive $60,000. Continue reading “US bonus season: Cravath kicks off by holding bonuses at 2012 levels”

On your merit: RPC abolishes flat rate salary for NQs

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City law firm RPC has taken the final steps to adopting an entirely merit driven pay model as it today (19 November) announced that from September 2014 it will abolish the traditional flat rate salary for newly-qualified solicitors (NQs) in the UK, and subsequently move to a system linked to merit and market rates.

In a move said to take into account what is happening in other sectors and the pressures that clients are under to achieve value, the firm will operate a variable pay scale where 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 major City firms, a firm statement said today. Continue reading “On your merit: RPC abolishes flat rate salary for NQs”

NQ retention and pay: Good news for NRF and Bird & Bird but FFW puts 5 trainees on extended contract

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If you see a rabble of trainees at the pub this lunchtime they may well be from Norton Rose Fulbright (NRF), which today (13 August) announced it has increased its newly-qualified (NQ) salary by £1,500 and offered in excess of 90% of its trainees a permanent position.

The newly merged, 3,800-lawyer firm has announced a trainee retention rate of 92% after offering 24 of its 26 trainees a NQ role, up from 89% in its last round in May. It has also increased its NQ salary from £61,500 to £63,000, effective 1 July (and backdated to 1 May this year). First and second year trainees will remain constant at £38,000 and £43,000 respectively. Continue reading “NQ retention and pay: Good news for NRF and Bird & Bird but FFW puts 5 trainees on extended contract”

Travers senior lawyers to be paid for interruptions to family life as firm adopts more merit-based model

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Travers Smith has become the latest City firm to overhaul its lockstep for senior associates in a bid to incentivise and reward lawyers for their hard work and interruptions to family life as they approach partnership.

Led by managing partner Andrew Lilley and pensions partner Paul Stannard, a 10-month review has concluded that Travers should continue to operate a strict lockstep for junior and mid-level associates, under which they receive an annual bonus at the end of the year. However, a new, more merit-based system will now be introduced for senior lawyers, including an additional one-off payment for those that have experienced disruption in their personal lives and increased flexibility from the lockstep structure for associates with six years’ post qualification experience (PQE). Continue reading “Travers senior lawyers to be paid for interruptions to family life as firm adopts more merit-based model”