But the feedback from partners (who are more supportive of this move than the divisive bonus episode) indicates there is something much more powerful than strategy driving the review: demographics.
The issue for Ashurst — as with most rivals — is an equity partnership concentrated at the upper end of its lockstep. Obviously, this makes it harder to provide incentives to retain young partners, who typically now also serve time on fixed-share status.
The favoured solution is a rebasing of the firm’s 20-50 point ladder to favour entry-level partners. A complementary move would be to nudge the lockstep further down the managed path, possibly with more gateways.
This trend is fast taking hold of the
The irony is it is this little-heralded hand of partnership demographics rather than the much-cited impact of international expansion that is driving this shift. After manic 1990s expansion, most firms have overly flat compensation structures not fit for purpose; one major firm that reviewed its partnership recently had three-quarters of its equity partners on plateau status.
This does not mean lockstep is dead. The model has much to recommend it, not least its ability to bind firms together and relative simplicity of upkeep. But the curiously restrictive model that gained favour in the 1970s is giving way to a longer, more layered, actively managed and complex system. Pretty soon, “constantly under review” will be less vacuous press-speak and more statement of fact.