A&O brings forward bonuses for City associates after internal review

Allen & Overy (A&O) has overhauled its bonus scheme, dropping a lengthy deferral period for handing out bonuses to London associates.

The magic circle firm has cut back the delay associates faced to receive their bonus from 12 months to four, after receiving feedback from associates in an internal survey.

The changes, first reported on RollonFriday, mean associates due to collect their bonus for 2008-09 in July 2010 will now receive the payment in January 2010.

In future, bonuses awarded under the firm's London Associate Award Plan will be paid in the November payroll, following the end of the financial year.

A&O overhauled its associate pay structure in 2006, bringing in a bonus scheme intended to retain associates for longer. The revised system saw the bonus linked to performance, mirroring the partner points system in the lockstep.

Senior associates were eligible for a payment equivalent to two equity points in a year, with mid-level associates in line for up to one. Junior associates and newly-qualified lawyers receive a fixed bonus every year.

Points were awarded according to a handful of criteria, including performance over the year, value of performance going forward and performance of the practice area overall.

A statement from A&O on the decision to bring forward bonuses said: "We remain committed ensuring our total packages are competitive with our key competitors in order to retain our top talent. As such we have recognised the need to make changes to ensure associates value the awards made under our existing plan."

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