RPC moves to merit-based pay for newly-qualified lawyers

RPC is to abolish the traditional flat rate salary for newly qualified lawyers (NQs) in favour of a merit-based salary band.

The change comes into effect from September 2014 and will result in a slight reduction of the current NQ rate, which has stood at £58,000 in London and £44,000 in Bristol since 2010.

However, the highest performing NQs will be able to earn above the upper rate of the Magic Circle firms, currently around £63,000, based on a range of criteria including overall performance, client relationships and contribution to the firm.

NQs, along with all other associates at the firm, will still be eligible for a bonus on top of their basic pay.

“The concept of the flat rate has passed its sell by date and no longer has any integrity,” said the firm’s managing partner Jonathan Watmough (pictured).

“It does not recognise the different merits of individual NQs nor does it recognise the market variances between the different branches of law into which they will qualify.

Watmough added that the move was an effort to take account of “the pressures clients are under to obtain value from their suppliers”.

RPC abandoned the partner lockstep model over a decade ago, and introduced a merit-based career framework for associates in 2009, which seeks to reward higher-performing junior lawyers with earlier promotion and pay increases.

“This move isn’t motivated by cost-cutting,” added Watmough. “It just makes sense to us to reflect the merit-based approach in the rest of the firm – which is, after all, that used by most of our clients.”

“More than ever, these days we live in a value economy, and we need to be able to demonstrate to our clients that we are offering them good value for money from all of our lawyers.”

“NQ salaries were inflated in the boom years before Lehman Brothers collapsed but have so far been exempt from the recalibration felt across the profession.

“In response to client demands every progressive firm has, over the last five years, reviewed and challenged every aspect of its operations, looking to release value. NQ salaries cannot, and should not, escape this.”

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