Linklaters plans to shift its traditional pay model for partners so “exceptional” individuals can be held on to with larger salaries.
Senior partner Aedamar Comiskey confirmed in a statement that the move, which will apply globally, was backed by Linklaters’ 500 partners through a vote.
The main changes include the ability to offer more money to Linklaters partners who make an “exceptional contribution”, the ability to fast-track them and put them forward for partnership sooner.
Partners are the firm were reportedly paid £1.77m on average in the last financial year.
“Notwithstanding these changes,” Comiskey added, “lockstep will continue to underpin our strong culture of collaboration, collegiality and teamwork.”
A “lockstep” structure is a pay model which rewards all partners of the same seniority level equally, so they are paid the same regardless of individual performance.
Linklaters is only the latest magic circle firm to move away from this system though. Allen & Overy and Freshfields Bruckhaus Deringer made the move last year and Clifford Chance reportedly followed suit earlier this year.
The news comes amid an ongoing bidding war between City law firms for junior legal talent, which has seen a flood of pay raise announcements for newly qualified lawyers.
Baker McKenzie is the latest firm to have joined the battle after announcing a salary hike for newly qualified lawyers to £105,000 while Linklaters made a similar announcement earlier in the year and increased pay to over £107,000 a year for its new lawyers.
Linklater managing partner Paul Lewis confirmed that the move away from a traditional pay model “underscores Linklaters’ commitment to attracting and retaining the best talent in the world”.
Law firms have fared well in 2021 despite lockdowns and a recovering economy. Revenue of the 100 biggest UK law firms grew by four per cent to £28.8bn in 2021, according to a report published earlier this week by a professional body for financial and professional services.