King & Wood Mallesons (KWM) has completed an overhaul of its pay structure in Hong Kong as part of the integration of its legacy King & Wood and Mallesons Stephen Jaques arms in the city.

The firm, which last month confirmed it will merge with the UK's SJ Berwin as of 1 November this year, has aligned the way its pays salaries and bonuses to lawyers from the legacy Chinese and Australian arms of the firm in Hong Kong.

Last March's Sino-Australian merger saw King & Wood's Hong Kong employees in Hutchison House move into Mallesons' office in Gloucester Tower in Central, creating a 124-lawyer office with 34 partners.

The firms initially retained their pre-merger pay structures, but following a prolonged integration process, associates will now be remunerated under one combined performance-based lockstep, moving through the salary bands at each level of post-qualification experience (PQE).

Legacy King & Wood and Mallesons both operated broadly similar models, but after four years' PQE, associates will now be considered for promotion to to the rank of senior associate, a role which did not exist at legacy King & Wood. The combined firm has also set new, simplified billable hours targets that vary with seniority, with both financial and non-financial contributions taken into account.

"The physical integration is at the end of our fifteenth month – it is an incredible stepping stone for us," said KWM global chairman Stuart Fuller (pictured).

"It really marks the last thing in the full integration. We created a new firm in Hong Kong; a new profit pool. What we've just finished is an alignment of the way we review lawyers, the way that we compensate lawyers and the bonus system. So over 15 months we've made remarkable progress in Hong Kong in bringing together two quite different firms; putting us together physically in Gloucester Tower."

The salary review period for KWM's Hong Kong associates will now run from 1 July to 30 June, aligning legacy Mallesons – which formerly operated a 1 April to 31 March review period – with legacy King & Wood's system. Packages will be announced in late August and backdated to July. Salaries at legacy Mallesons were previously announced in June.

Meanwhile, performance-based bonuses will now be paid in August. Legacy King & Wood paid all staff a discretionary bonus at Chinese New Year with a review period until that date, while legacy Mallesons paid bonuses in June with a review period between 1 April and 31 March.

The firm has also brought in online performance reviews and will now offer all staff one day's paid marriage leave. Legacy Mallesons provided no options for marriage leave.

"The items discussed ranged from our overtime policy to our relocation policy and our medical insurance plan – in all, there was around 40 material items and many small items that we needed to work through," said Hayden Flinn, a corporate partner at the firm who took a lead role in drawing up the new policies.

"We looked at what legacy Mallesons had in place, legacy King & Wood and also the Hong Kong market. We wanted to come up with something that was best for this office."

KWM's Hong Kong arm is the only financially integrated arm of the firm, which operates under a Swiss verein structure with separate partnerships in China and Australia. SJ Berwin will join the verein as a fourth member firm from 1 November this year.

SJ Berwin's nine Hong Kong lawyers, who are currently based in the Lippo Centre in Admiralty, are set to move into KWM's Gloucester Tower premises when the merger goes live. The office includes four partners – international funds head George Pinkham, corporate partners Peter Anderson and Tony Gibson and litigator Giovanna Kwong.

SJ Berwin's merger with KWM was confirmed on 31 July, creating a $1bn (£657m) firm among the 25 largest in the world. The merged entity will retain the KWM brand, although for a transitional period it will operate as King & Wood Mallesons SJ Berwin in the UK, continental Europe and the Middle East.