Freehills lawyers may see fewer bonus cheques under the firm's new uncapped bonus structure, but will instead benefit from more substantial bonus payments.
Freehills people and development director Gareth Bennett said the new scheme, which comes into effect at the beginning of the next financial year, is being deployed in a bid to retain its young lawyers, and will be available to non-partnership lawyers in their second year or above.
Bonuses, which were previously capped at between 10 to 15 per cent of a lawyer's salary, will now be uncapped.
"Feedback from lawyers was that our current scheme was possibly not as generous as that offered by our competitors," said Bennett.
"This was driven by a need for the firm to be more competitive and to ensure we retain and attract the best people."
As opposed to the previous bonus scheme, potential bonuses will be based on all-round performance and will not be tied to achieving specific goals.
"This is an opportunity for our lawyers to do something exceptional, and be rewarded at an appropriate level," Bennett said.
Bennett said the new bonus plan will be more "open and transparent", and is not concerned by the suggestion that because it's uncapped, it could potentially create internal tensions due to the greater disparity between bonus payments.
"The regular coaching sessions and formal and informal discussions between partners and lawyers as part of our performance enhancement process will mean that by the end of the financial year, when the bonus is decided, our lawyers should have a good idea of what sort of bonus they can expect," he said.
In a release sent to lawyers, Freehills said the new plan may result in fewer bonuses, but that bonuses would be more substantial.
The firm also expects the cost of its plan to remain similar to that of previous years.
Bennett also confirmed that the bonus pool will be split across practice groups. Individual bonuses will be verified by the practice group head, who will take representations from supervising partners.
The first bonuses under the new plan will be paid in July 2011.
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