Firm revamps pay structure as Norton Rose merger goes ahead

Leading South African firm Deneys Reitz is set to overhaul its partner pay structure as it prepares for next year's tie-up with Norton Rose.

The firm sent a note to its shareholders last week with suggestions for changing its remuneration structure from a points-based system that broadly operates as a pure lockstep, to a merit-driven tiered system with greater flexibility to move people up or down.

The move is part of a bid to better align partners' remuneration with Norton Rose, which already operates a heavily modified lockstep. The proposals need to be approved by the firm's partners but, if successful, will come into effect from 1 April – the start of the South African firm's financial year.

The three-way merger, which will also see Canadian law firm Ogilvy Renault merge into the Norton Rose Group, will see both firms name their own local sector heads to tie in with Norton Rose's 'headlights' sector groups. The strategy covers corporate finance; financial institutions; transport; energy and infrastructure; and technology – and, from 1 June when the merger is due to go live, life sciences. The firms will retain separate partnerships after the union.

Deneys Reitz deputy executive chairman Rob Otty said: "We are making some minor adjustments to our structure ahead of the merger, which has been phenomenally well received in the local market and among clients, particularly those in financial institutions."

Deneys Reitz will also make management changes ahead of the merger, as current executive chairman Michael Hart (pictured) is stepping down from his role in March 2011. He will then hand over to Otty, who will take the new title of managing director.

Ogilvy is not planning any changes to its partner remuneration structure, which is operated on a merit-based system, but is considering introducing a common partner appraisal system with the larger group at a later date.