MPF Pulse

PREVIOUS PULSE QUESTION

‘Equity Partnership structure’ from the Director of Human Resources of a Top 200 law firm

Q17: We are reviewing our EP structure. The firm has a traditional lockstep structure but, we need to increase flexibility by creating an extended lockstep. We are also exploring the creation of a ‘super-plateau’. I would be interested in members' experience in undertaking a similar exercise and with what results?

RESPONSES

28 January – CEO, Regional law firm

We undertook a similar exercise about 5 years ago. The background was that 85% of the profits were split according to lockstep and 15% on performance in the year in question. But there was a wide disparity in performance between the various Partners who had reached the top of the lockstep - 100 units. After looking at a lot of complicated ways to assess performance annually, we decided that, fairly consistently over the previous five years, there were four Partners who had out-performed the rest and the solution we reached, to keep everything simple, was therefore that those Partners went to 120 units, the rest stayed the same and the performance element was reduced from 15% to 7.5%. Everyone seemed happy with that solution. It was left that if anyone felt that if any of the 120 unit Partners no longer deserved to be on that plateau then they could raise it and there has in fact been one adjustment under this method, with one of those Partners recently dropping to 110 units.

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