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.
I also work at SJ Berwin but have kept quiet until now, partly in awe at the anger that 'Bonusgate' has elicited from so many colleagues below. For the record, I think the quotes are about right as an indication of how people are feeling within the firm. The very long posting below that begins "To balance out..." is already something of a standing joke among associates - it's transparently the SJB PR machine doing what it does best: presenting black as white and white as black. Working at SJB you come to expect that sort of behaviour. What seems to matter most is whether PEP is more than last year and to hell with anyone who doesn't get to share in the equity.
I think the comment below by 'Associate, US firm' (whose partner works at SJB) has hit the nail on the head. The fiasco about the bonus scheme is only the tip of the iceberg. What it has done is act as a springboard to unleash serious concern amongst assitants within SJB about the way they are being treated and managed. It was the straw that broke the camel's back.
I am dismayed by the amount of criticism by SJB associates over what, to me, seems like a half decent first attempt by the strategy committee to improve the bonus structure. Perhaps there should have been more consultation, but it is hard to see why everyone is criticising the bonus when anybody that is working at all hard is better off under the new system.
I don't work at Berwins but my other half does. I work at a US firm and get paid significantly more than her, even though we're in the same practice area and at the same PQE. Although we work similar hours, her life there has been so miserable that I've begged her to look elsewhere. From where I stand, the uproar over the half-baked bonus proposals indicates the existence of much deeper problems with the way the firm is run, including the way partners think of and therefore treat associates. It doesn't surprise me that the management are now promising to match Magic Circle salaries. I do wonder, however, whether that will suffice. I'm encouraging my partner to leave anyway. Life is too short.
I will eat my keyboard if the posting below which starts "To balance out some of the comments" is actually written by an SJ Berwin associate!
I have seen the SJB memo by associates that was leaked to Legal Week. It contains literally dozens of concerns from various sectors of the firm. To suggest, as someone has below, that some of the comments on this Talkback are written by a few "malcontents" is ludicrous. I work at SJB (not for much longer) and there is a high level of discontent amongst assistants from all corners of the office. Why is it that so many people have an axe to grind with the same place?
The lengthy scribe below by "SJ Berwin Associate" (aka member of management committee) makes a pertinent point - albeit the wrong way round. At the current rate, soon there won't be many associates left at SJ Berwin who are willing to endure the experience!
Wow! I am an associate at SJB and can say hand on heart that none of my colleagues would write the lengthy defence statement below. Has Ralph Cohen now been demoted to an associate?
To balance out some of the comments below: I think that many of these comments are uninformed. Let's face it, Berwins associates' hours are no longer than anyone else's in the London legal world and it is disingenuous to imply otherwise. The difference is that Berwins has recognised this and acted to compensate those who, for whatever reason, do work long hours (I am not one and so have no particular benefit from this bonus scheme). I would be saddened to learn that any associate was doing 2,500 hours, but the figure has had far more focus than it merits. Few associates will get anywhere near it - or would want to. However, those who do work the long hours (owing to client needs, incidentally: no-one does it for fun) should be compensated. As for the "atmosphere and shocking culture that pervades the firm", if this is true, how very curious that anyone is left here! There is no doubt that in one corner of the firm this description is apt (indeed it understates the case), and if "Ex-SJ Berwin Associate at US law firm" worked there, or had anything to do with it, he/she has my sympathy. It is true of other corners also, but the description is generally untrue, in my (quite wide) experience. There is of course always a degree of grumbling and, of course, malcontents - but that is true of everywhere. These comments, incidentally, are not me 'sucking up to management', as the more cynical reader may conjecture. Rather, it is a small attempt to put in perspective what seems to me (and, I think, others here) what has been a worthy move by management that has, alas, been badly presented, but also misrepresented by the press (Bonuses Are Bad For Lawyers - a novel headline!) and by those with an axe to grind.
I'd be far more impressed if a law firm rewarded the output of excellent client service, perhaps measured through a customer satisfaction survey, rather than the input of time spent. After all, just because someone has spent a long time on a project doesn't mean the end product is any good!
The fact that a firm has assistants charging 2,500 hours should be seen as a problem in need of correction by management, rather than as something to be rewarded. What century are these people living in?
I note the first two postings about David Harrel. I remember him as quite "statesmanlike". However, as Senior Partner at SJ Berwin for over 10 years he must take ultimate responsibility for the atmosphere and shocking culture that pervades the firm. Jonathan Blake and Ralph Cohen inherited that culture earlier in the year. Rather than making a fresh start, they seem to have taken a giant step backwards with this debacle.
That bright young thing will cost the partnership an extra salary, meaning lower profits. So sorry, you'll have to make do with the knackered 9 o'clocker. From your comments one might be forgiven for thinking partners are more concerned with service than money.
Interesting to note the question is slanted to the interests of the lawyer concerned (which ARE important of course) - but what about the poor client billed the same for a drowsy lawyer working at 9pm as for the bright young thing on the ball when only working REASONABLE hours?
A staggering, if all too predictable, return to the SJB of old.
Speaking from experience, any 'moth' attracted to the light at SJ Berwin to work those hours will rapidly evolve into a rabbit caught in headlights. This latest development will do nothing to improve the culture at SJ Berwin.
A number of people left upon the appointment of Jonathan Blake. There has been an increasing emphasis on associates to deliver unrealistic goals. I have no regrets at leaving.
No doubt the 75% headline will attract a certain type of lawyer to SJ Berwin like a moth to light - an assitant looking to get a short-term financial fix at the expense of all else. Surely it must be a concern to the clients of SJB that these sorts of lawyers will be working on their transactions and are being heavily incentivised to bill, bill, bill?
As a junior associate at SJ Berwin I think the new bonus scheme is dubious. I will not benefit from it in any meaningful way becuase I do not bill over 2000 hours a year. Besides that, the misjudgment by our 'Strategy Committee' is very embarrasing. We look like mugs!
Harrel was massively impressive when I was there on a vacation scheme and was very different to the atmosphere and behaviour on the ground in the corporate department. Then again, he is a litigator.
When senior partner David Harrel was in place this disastrous plan would not have been hatched. He was the ultimate safe pair of hands and by the looks of it will be sorely missed. All SJB clients would be well advised to check their bills rigourously as this kind of short-sighted policy will inevitably encourage padding.
Now that the bonus row has quietened, the word on the floors is that management have decided to introduce mid Atlantic salaries from the start of the new financial year. If they do that then I think a lot of problems will be solved. No one asked for the stupid bonus system or wants it.
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