SJ Berwin faces mounting dissent over 2,500-hour bonus incentive

SJ Berwin is standing firm over its controversial bonus scheme despite mounting internal unrest over its decision to reward assistants for billing up to 2,500 hours a year.

The top 20 UK firm this week vowed to stick by the scheme, which is generating intense anger among the firm’s assistants for focusing the bulk of incentives on lawyers billing more than 2,000 hours annually.

Under the scheme, top performers can receive as much as 75% of their basic salary through the bonus, despite the firm operating a much lower annual billing target of 1,575 hours.

Critics have accused the firm of ‘institutionalising’ high targets with the bonus, with a series of assistants posting critical responses on Legal Week’s web-site after the bonus package was announced on 24 November.

One SJ Berwin lawyer posted: “I work there and can tell you from the horse’s mouth that associates there feel insulted by the suggestion that they should work so hard for a bonus when other firms are handing out pay-rises.”

A firm-wide email from senior partner Jonathan Blake on 1 December in response to press coverage of the bonus has also been poorly-received internally.

Commenting on an article on the website RollOnFriday, Blake wrote: “The picture in the attached article is so funny I just have to share it with you. [The SJ Berwin bonus scheme] is being misinterpreted as an inducement to overwork… the 75% is just a maximum the press have focused on.”

The firm this week reiterated its claim that the scheme was designed to reward high-billers rather than encourage assistants to aim for 2,000 hour-plus billing.

Managing partner Ralph Cohen told Legal Week: “Our targets have not changed, but we feel that if a lawyer has done that level of hours they should be recognised and rewarded. The great majority of people will be doing far fewer hours, but will still be getting considerably more than under the previous scheme.”

However, SJ Berwin’s package has been widely criticised as an own-goal by rivals.

One head of corporate at a top 20 UK firm said: “Rewarding people for hours over and above the benchmark is sensible – rewarding people for billing 2,500 a year is sending out entirely the wrong message.”

The move comes against a backdrop of mounting unease from corporate counsel at the prospect of commercial firms using aggressive bonus schemes to squeeze more work out of their assistants.

Barclays general counsel Mark Harding said: “As a matter of practice there will be associates at a firm like SJ Berwin who bill that many hours. Should they be rewarded? Yes, they should. Am I in favour of this culture? No, I am not. We would be concerned if any firm was working its associates so hard they could not perform.”

Richard Hoare, general counsel at Gulf Oil International, added: “It is unrealistic and encourages people to create results which are unrealistic. Frankly, I doubt if an assistant who bills 2,500 hours a year will have any brain left.”

However, with firms increasingly desperate to recruit and retain talented lawyers, pay pressure is mounting in the City legal market.

As exclusively revealed on 5 December by legalweek.com, US giant Jones Day has just agreed to hike its starting UK salaries from £60,000 to £70,000.

Talkback: Should assistants be given incentives to bill 2,500 hours? Post your comments below.