Herbert Smith Freehills partners set to receive pay proposals
Herbert Smith Freehills partners are expecting to receive proposals on the planned move to a single modified lockstep after the summer, as the firm gears up to introduce a combined partner remuneration structure from the start of the next financial year. Management are currently working out proposals to take to partners, with some legacy Herbert Smith partners saying they expect a vote to take place in October this year. The overhaul is expected to see the legacy UK arm move away from its rigid eight-year lockstep, shifting closer to Australian merger partner Freehills. The pair entered into a full financial union in October 2012, but are currently paying partners according to two different pay structures, with legacy Freehills' heavily linked to individual performance.
May 23, 2013 at 07:03 PM
2 minute read
Herbert Smith Freehills partners are expecting to receive proposals on the planned move to a single modified lockstep after the summer, as the firm gears up to introduce a combined partner remuneration structure from the start of the next financial year.
Management are currently working out proposals to take to partners, with some legacy Herbert Smith partners saying they expect a vote to take place in October this year.
The overhaul is expected to see the legacy UK arm move away from its rigid eight-year lockstep, shifting closer to Australian merger partner Freehills. The pair entered into a full financial union in October 2012, but are currently paying partners according to two different pay structures, with legacy Freehills' heavily linked to individual performance.
From 1 May 2014, the firm is due to operate a single system, with the Australian arm switching to the UK business's financial year. Possible options include a profit pool for rewarding star performers or the use of gateways. Freehills may also introduce salaried partners for the first time as a consequence of the change.
The ongoing remuneration review comes after legacy Herbert Smith equity partners were called on to pay in £2,000 per equity point, in a bid to improve the firm's capital structure. The move, also intended to better align the two parts of the business, will ensure higher levels of partner capitalisation, reducing the need for holding back partner distributions to fund investment.
The firm has seen a spate of departures in recent months, with the London disputes team hit particularly hard.
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