This includes the creation of two new positions between associate and partner and the introduction of a performance-based bonus plan linked to the value of a partner profit sharing point.
Description
The new, integrated structure comprises:
- upgraded performance and development capability, including a new global competency framework
- a new career structure
- a new career management support programme
- an annual Senior Associate Conference
- a radical new approach to rewarding performance.
Global competency framework
In December 2006, Allen & Overy introduced a new global competency framework, validated by associates and partners across the Allen & Overy network. The framework encompasses the observable skills, behaviours and personal attributes that define successful performance in an associate role.
This framework has provided much needed clarity and transparency of performance expectations and development goals for Allen & Overy's associates at all stages of their careers. To ensure the framework's successful implementation, Allen & Overy has made a significant investment in improving the capabilities of its partners and associates to deliver on its performance management objectives through additional coaching and training.
Career structure
As from 1 May 2007, there will be two new career options: Senior Associate and Counsel. Both are positions into which associates are promoted on merit and, in the case of Counsel, provide an alternative to partner. Not all Allen & Overy lawyers aspire to be partners, for a variety of reasons, yet wish to be recognised for their capabilities and achievements.
Career management support programme
In November 2006 Allen & Overy piloted a career workshop delivered by Blessing White, an external company specialising in career coaching. From May 2007, these workshops will be offered to all London associates. They will provide information, advice and support for associates at the crucial ‘crossroad’ stage in their career of three to four years post-qualification, enabling them to better plan their future career paths.
Senior Associate conference
In July 2006 Allen & Overy held its inaugural senior associate conference in Brighton. Designed by associates for associates, it was attended by over 150 senior associates, including a representative from each of Allen & Overy's 25 overseas offices.
Its aim, in the words of banking associate Michael Castle who led the organising committee, was “to ensure that the flow of information was from associates to partners – rather than the other way round” and also to secure “some tangible results which would make a real impact on the future of the firm”.
Performance rewards
The final part of the structure is a radical new approach to remuneration and reward for Allen & Overy's high-performing and committed associates. This is the London Associate Award Plan (LAAP). Two features make this plan unique among the top 10 City law firms. Firstly, the size of bonus offered, which is linked to the value of a partner profit point.
Secondly, payment of such a bonus is deferred for 15 months, as an inducement to associates to stay with the firm.
Rationale
Allen & Overy, like many other City law firms, has been facing high levels of associate attrition, in part because associates have felt that they are not being rewarded fairly for the long hours and the contribution they make. Many felt frustrated at the limited career path options - which in essence were restricted to progressing from associate to partner.
Allen & Overy recognised that change was needed. In order to retain associates, offer them better rewards more closely tied to the firm’s profits and provide a more enlightened career progression, an alternative career path and reward structure needed to be put in place for the firm's London associates.
When the innovation was implemented
After 10 months of consultation, Allen & Overy announced the new structure in October 2006, to widespread interest internally, within the wider legal community, and amongst the legal press.
Impact and results
Allen & Overy's associates have greeted the LAAP as being “way beyond their expectations”.
The new bonus structure is performance based, with awards reflecting individual contribution rather than level of qualification. The new roles have also been well received by associates: the position of Counsel is seen as a real alternative to partnership.
Associates have said that they welcome the inherent recognition that not everyone aspires to be a partner. Senior Associate is seen as a much-needed signpost in what many associates refer to as “the wilderness years” and an opportunity to enjoy more autonomy and accelerated development in their career.
It is anticipated that 11 Senior Associates will be promoted to the position of Counsel with effect from 1 May 2007. The new performance management, skills training programmes, coaching and online guides established to help reviewers and reviewees deliver a more effective performance development process and have been well received by partners and associates alike. They have facilitated a more open and informative dialogue between the two groups.
The senior associate conference received excellent reviews and was welcomed by those taking part. It will now be an annual event. The conference resulted in a senior associate being co-opted on to Allen & Overy's management committee.
This is the first time an associate has been involved in management and reflects the importance that Allen & Overy attaches to the views of associates. Finally, in terms of achieving the overall objective of retaining talent, Allen & Overy has seen the turnover of London associates drop by over nine per cent in the past 12 months.
Further information
Read more about innovation at Allen & Overy.
To find out more about this subject, contact Jane Foley jane.foley@allenovery.com or telephone +44 20 3088 3674.