Greater weight placed on performance after partner pay review

Norton Rose equity partners will see their share of the firm's profits re-based as part of an overhaul of the lockstep and the introduction of a more merit-based remuneration structure.

The shift, which was voted through by partners over the summer following a review by the partnership council, will see the firm extend its lockstep at the top and put greater weight on individual performance from the start of the new financial year in May 2012.

It is intended to allow faster progression for high-achieving younger partners and to better reward star performers, with all of the firm's partners to see their profit share reallocated with the move.

Norton Rose's modified core lockstep currently runs from 100 to 250 points with three gateways and a 300-point super plateau.

The new structure divides the lockstep into bands running from 100 points through to 350, with partners able to move within their band annually but assessed to move up or down one band – or stay put – every three years. Progress will be decided by a five-partner remuneration committee, taking into account softer elements as well as financial performance.

Norton Rose chief executive Peter Martyr (pictured) said: "Broadly speaking we have had a relatively traditional structure for partner remuneration in the past. The partnership has now decided to change it to allow greater flexibility when taking into account the range of a partner's performance."

One partner at the firm commented: "This had to be done, but it is going to create enormous bureaucracy. Also, because you can only move up or down one band every three years, if someone is significantly underpaid or overpaid it will take a very long time before that 
is rectified."

Individual profit allocations will not be shared automatically but partners will be able to request to find out.

The overhaul is believed to be unpopular with some partners within the firm who fear it could discourage mid-level partners at the firm who may see their profit share reduced.

One ex-partner said: "With any merit system there is an element of subjectivity and there is some concern that there will be an in-crowd that will be paid very well. But it could quite likely upset what you might call the very solid middle – if they are not looked after properly you might see some people leaving."

The news comes as a number of City firms have recently reviewed their locksteps with a view to better reward merit, including SJ Berwin and Pinsent Masons. Meanwhile magic circle firms Linklaters, Freshfields Bruckhaus Deringer and Allen & Overy are also considering changes to their locksteps.