Michael Herman
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It was intriguing that the loudest sighs of relief after Peter Bloxham lost his age discrimination claim against his former partners at Freshfields Bruckhaus Deringer last week were from lawyers nearer the end than the start of their careers.
In almost any other profession, those nearer the end of their careers — older partners, in other words — would be rooting for Bloxham in the hope that a victory might scare their own bosses out of trying something similar. But because of the traditional (some would say archaic) system of lockstep partnership that most UK firms still employ, the legal world has turned this logic on its head.
A lockstep structure dictates that some of a law firm partner’s pay package is determined according to how long he has been a partner. The longer he (or she) has served as a partner, the reasoning goes, the more he has contributed to the firm and its reputation. That contribution entitles him to a larger share of the overall pot than newer partners, regardless of how much revenue he has generated.
Ever since the Employment Equality (Age) Regulations 2006 began their passage through Parliament, lawyers have been kicking and screaming about the looming clash between lockstep and the principle of not discriminating against someone on the basis of their age. Established partners have feared that their juniors would turn on them. Doesn't it go without saying that a system that favours the old over the young is unfair — and now illegal?
Bloxham’s case was ostensibly about some very complicated changes to his former firm’s pension scheme, but it addressed the wider and much more serious question of whether it is possible to justify discriminating against someone on the grounds of age if it helps achieve a broader goal. The answer was a resounding yes.
It follows that if Freshfields can legitimately penalise Bloxham by cutting his pension because it helped address an imbalance burdening younger partners, the flip-side is also true: older partners can justifiably pay themselves more because they have been there longer.
No-one is suggesting a structure that would allow, say, older partners to spend most of the week playing golf while the younger partners do the work for a fraction of the profits. Performance has to be rewarded. But the reality at the vast majority of UK firms that use lockstep is that individual performance is already taken into account. Star fee-earners will always be handsomely paid, whatever their age.
But a system that also rewards length of service not only helps build loyalty and collegiality among partners, it introduces a healthy dose of humility. If a younger, higher billing partner is so good, he is welcome to break away and set up on his own so that he doesn't have to share the spoils. A few do and become rich. But most do not, which illustrates that at least part of their ability to bring in lucrative work is down to the fact that they belong to an established firm that others before them have built up.
Thanks to the Bloxham case, the principle that law firms can reward someone simply for having been around longer looks secure. And that is something the profession should be grateful for.
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