A lot of firms talk a lot of rubbish about cohesive, collegiate partnerships these days but the competitive spirit within law firms is alive and well. Politicking, back-stabbing and underhand, cut-throat tactics are all employed to help everyone ascend the greasy pole. But there is another way. Snubbing the hard-nosed approach can work: just look at Bristows.
In our interview with the co-managing partners Iain Redford and Mark Watts (see ‘Geek chic’ page 44), they reveal that the 34-partner firm is a rare beast indeed. It is all-equity. It operates a pure, ten-year lockstep. Most significantly, the firm has no billing targets for any level of fee-earner. This at a time when other firms are increasing their billing targets for associates in particular, often without increasing pay.
The apparent benevolence doesn’t seem to be hurting Bristows, which has posted revenue and profit growth that has far outstripped many rivals in the City and around. In fact clients, who don’t really care how profitable their law firms are as long as they are getting good value, have said that Bristows’ business model benefits them as client relationships aren’t particularly possessive.
Bristows, with a pure lockstep and no billing targets, is one of the easiest firms to run.
While Bristows has seen partners leave (although not since 2007), the partnership is a pretty cohesive bunch. This is in sharp contrast to the internecine war in evidence at many firms. A recent study released by accountants BDO shows that up to 25% of partners’ time is wasted due to issues related to pay and performance. Bristows, with a pure lockstep and no billing targets, is one of the easiest firms to run – as Watts says, everyone ‘just gets on with it’.
The BDO report suggests that the cost of getting key measurements of pay and performance wrong could run into millions, so simplicity can be a virtue, especially as the key issue for any remuneration system is its innate fairness. 33% of the respondents were in a merit-based remuneration system while another 46% were at firms that operated modified or managed locksteps. Despite this dominance of merit-based structures, around half of the partners surveyed think they should be paid more. So merit-based systems aren’t always fair.
But private practice lawyers should spare a thought for in-house lawyers. As we report on page 16, average salary increases among the in-house community in 2012 lagged well behind inflation. Companies are increasingly turning to bonus systems to reward their GCs but such rewards are discretionary and often hard to come by. This highlights the difference between a private practice partner who can justify their remuneration in terms of fees generated and a commercial in-house champion who services a business. While both add value commercially, only one is truly reaping the rewards.