Watson Farley creates bonus system for fixed-share partners in light of HMRC tax reform
Watson Farley & Williams has revamped its remuneration structure in response to HM Revenue & Customs' (HMRC) overhaul of tax rules for professional partnerships.
May 27, 2014 at 06:47 AM
2 minute read
Watson Farley & Williams has revamped its remuneration structure in response to HM Revenue & Customs' (HMRC) overhaul of tax rules for professional partnerships.
The firm's 20 fixed-share partners in London will put just over 20% of their earnings into a new fund. This will later be redistributed as year-end bonuses, conditional on the firm's performance.
Co-managing partners Chris Lowe and Lothar Wegener have overseen the changes. In January the duo replaced longstanding managing partner Michael Greville, who had led Watson Farley since 2001.
The firm's salaried partners unanimously backed the model, known as a "variable share" structure, during a consultation that gave them a choice between the new system and the option of remaining as fixed-share partners.
The decision means that the firm will not have to pay national insurance contributions for junior partners with small shares in the business.
Under the new rules, junior partners must meet at least one of three conditions to maintain self-employed status: at least 20% of an individual's pay must be dependent on the firm's profits; at least 25% of their fixed pay must be contributed in capital; or they should demonstrate they have significant influence on the overall partnership.
The majority of City firms have responded to HMRC's new rules by asking junior partners to put in extra capital. These include CMS Cameron McKenna, Hogan Lovells and Eversheds.
Meanwhile, the likes of Withers and Ashurst have increased the variable element of junior partners' pay that is linked with the firms' performance without requesting additional capital, with the former adjusting arrangements for 25 junior partners.
Related: Top firms call on junior partners to up capital contributions as new HMRC rules go live
- How attractive are your firm's benefits? Click here to provide confidential feedback in Legal Week Intelligence's annual employee satisfaction survey.
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
NOT FOR REPRINT
© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
You Might Like
View All
Malaysia’s Shearn Delamore Set To Expand Local Footprint With New Office Launch
CMA Uses New Competition Powers to Investigate Google Over Search Advertising
‘A Slave Drivers' Contract’: Evri Legal Director Grilled by MPs
Trending Stories
- 1Jury Awards $6.2 Million in Walmart Slip & Fall
- 2'If the Job Is Better, You Get Better': Chief District Judge Discusses Overcoming Negative Perceptions During Q&A
- 3Nondisparagement Clauses in Divorce: Balancing Family Harmony and Free Speech
- 4Survey Finds Majority of Legal Professionals Still Intimidated by AI Despite Need to Streamline Mounting Caseloads
- 5Lessons From Five Popular Change Management Concepts: A Guide for Law Firm Leaders in 2025
Who Got The Work
J. Brugh Lower of Gibbons has entered an appearance for industrial equipment supplier Devco Corporation in a pending trademark infringement lawsuit. The suit, accusing the defendant of selling knock-off Graco products, was filed Dec. 18 in New Jersey District Court by Rivkin Radler on behalf of Graco Inc. and Graco Minnesota. The case, assigned to U.S. District Judge Zahid N. Quraishi, is 3:24-cv-11294, Graco Inc. et al v. Devco Corporation.
Who Got The Work
Rebecca Maller-Stein and Kent A. Yalowitz of Arnold & Porter Kaye Scholer have entered their appearances for Hanaco Venture Capital and its executives, Lior Prosor and David Frankel, in a pending securities lawsuit. The action, filed on Dec. 24 in New York Southern District Court by Zell, Aron & Co. on behalf of Goldeneye Advisors, accuses the defendants of negligently and fraudulently managing the plaintiff's $1 million investment. The case, assigned to U.S. District Judge Vernon S. Broderick, is 1:24-cv-09918, Goldeneye Advisors, LLC v. Hanaco Venture Capital, Ltd. et al.
Who Got The Work
Attorneys from A&O Shearman has stepped in as defense counsel for Toronto-Dominion Bank and other defendants in a pending securities class action. The suit, filed Dec. 11 in New York Southern District Court by Bleichmar Fonti & Auld, accuses the defendants of concealing the bank's 'pervasive' deficiencies in regards to its compliance with the Bank Secrecy Act and the quality of its anti-money laundering controls. The case, assigned to U.S. District Judge Arun Subramanian, is 1:24-cv-09445, Gonzalez v. The Toronto-Dominion Bank et al.
Who Got The Work
Crown Castle International, a Pennsylvania company providing shared communications infrastructure, has turned to Luke D. Wolf of Gordon Rees Scully Mansukhani to fend off a pending breach-of-contract lawsuit. The court action, filed Nov. 25 in Michigan Eastern District Court by Hooper Hathaway PC on behalf of The Town Residences LLC, accuses Crown Castle of failing to transfer approximately $30,000 in utility payments from T-Mobile in breach of a roof-top lease and assignment agreement. The case, assigned to U.S. District Judge Susan K. Declercq, is 2:24-cv-13131, The Town Residences LLC v. T-Mobile US, Inc. et al.
Who Got The Work
Wilfred P. Coronato and Daniel M. Schwartz of McCarter & English have stepped in as defense counsel to Electrolux Home Products Inc. in a pending product liability lawsuit. The court action, filed Nov. 26 in New York Eastern District Court by Poulos Lopiccolo PC and Nagel Rice LLP on behalf of David Stern, alleges that the defendant's refrigerators’ drawers and shelving repeatedly break and fall apart within months after purchase. The case, assigned to U.S. District Judge Joan M. Azrack, is 2:24-cv-08204, Stern v. Electrolux Home Products, Inc.
Featured Firms
Law Offices of Gary Martin Hays & Associates, P.C.
(470) 294-1674
Law Offices of Mark E. Salomone
(857) 444-6468
Smith & Hassler
(713) 739-1250
