UK law firms turn to performance-based bonuses to attract and retain junior lawyer talent
In the battle to secure the brightest junior legal talent, UK law firms are ramping up their compensation strategies, offering performance-based bonuses as a key differentiator.
Simmons & Simmons, a prominent City firm, is leading the charge with a revamped bonus scheme that ties rewards directly to billable hours. Starting this summer, associates who meet or exceed 1,800 chargeable hours will be eligible for bonuses ranging from 25% to 40% of their annual salary. For the firm’s junior associates, who typically earn around £120,000, this could translate into bonuses of £30,000 to £48,000 — provided they hit the high mark of 2,100 billable hours.
The decision follows a review of the firm’s old discretionary bonus system, and Simmons says the updated scheme is a “central part” of their talent retention efforts. The goal is to motivate top-performing associates while ensuring their efforts are rewarded in line with their contributions.
RPC, another UK law firm, has also introduced a performance-based structure, increasing bonus potential to 30% of associates’ salaries, up from 20% last year. Associates at RPC now need to achieve 1,575 billable hours — a target that includes both client hours and investment time — to earn base bonuses, with additional rewards for exceeding that threshold. Managing partner Antony Sassi described the revised approach as “modern, inclusive, and sustainable,” aligning with what he sees as the evolving expectations of the next generation of legal talent.
Embed from Getty ImagesHowever, as firms push associates to work longer hours to meet these ambitious targets, concerns about burnout are growing. Shoosmiths has attempted to address this by capping their bonus rewards at 1,900 hours, stating that they don’t want to incentivise unhealthy work patterns. Their scheme offers bonuses of up to 19% of salary for associates billing over 1,485 hours.
Meanwhile, Linklaters, a key player in the Magic Circle, is moving away from a strict focus on billable hours. The firm has decided to shift its bonus structure to reward revenue generation, cross-selling, and active participation in firm initiatives. This marks a significant change in the industry, reflecting broader concerns about the sustainability of traditional billable hour targets and the need to recognise more holistic contributions.
The new bonus structures are part of a wider trend across the legal industry, where firms are responding to intense competition for junior lawyers. As pay wars heat up, some firms are offering eye-watering bonuses to attract top talent, while others are attempting to balance financial incentives with concerns over the wellbeing of their staff.
Despite the potential for generous rewards, the focus on billable hours remains contentious. The pressure to meet high targets can lead to long, stressful workdays, with junior lawyers often facing a choice between their health and their paycheck. Legal professionals are calling for a more balanced approach, one that values work-life balance as much as performance.
Moreover, some firms have introduced measures to ensure their bonus systems don’t push associates too far. A&O Shearman, for instance, used bonuses to enforce office attendance among juniors, threatening to withhold performance-related pay from those who continued to work remotely. This move has been met with mixed reactions, as firms try to navigate the changing landscape of post-pandemic working patterns.
As law firms adjust to a shifting environment, the question remains: how sustainable are these bonus-driven strategies in the long term? While they may be effective in attracting talent now, the risk of burnout and dissatisfaction could undermine their success if firms fail to consider the human side of the equation.
