Some law firms, having moved partners away from lockstep towards a more strict merit-based system, have now turned their attention to the way they price and reward assistants and associates. Unpicking the use of PQE to decide on fees and reward is a logical step, but as a piece of change management, it throws up particular challenges.At the 2nd Global Managing Partners Summit last week, for which the Gazette was a media partner, attendees heard from Stephenson Harwood’s director of HR and training, Jeff Marlow. The firm is most of the way through the process, though some ‘cushions’ remain. In place of PQE, as part of their reviews lawyers can move up or, after a moratorium, down, a scale of charge-out rates with linked rewards.

‘This is about getting value from our costs, not reducing our costs,’ Marlow explained. ‘In fact, costs increased, with a greater number of associates being recognised for what they do.’

One challenge is to manage the change from PQE. In the case of Stephenson Harwood, even though associates had been keen on the idea when consulted, plenty of time was spent addressing anxieties as the new structure came in. Managers needed to work equally hard with partners, who had previously conducted the reviews of team members in isolation from remuneration. The new system demanded a lot more from them.

But there are two further challenges for any firm unpicking PQE. The first is to decide on the list of what you reward. There were plenty of ideas at the Summit for this list, which included things that should help law firms to perform better in a changing legal and business landscape: languages, project management skills, ability to use internal and external networks, utilising IT to give the business an advantage, positive feedback from clients and colleagues, and so on.

The long list is imaginative, and includes many items not being used by Stephenson Harwood at this point. But the second challenge is even bigger – how to measure or assess some of these skills, abilities and achievements. One managing partner at the summit noted that their firm needed to become ‘more porous’. All very good, but how do you recognise and reward enhanced porosity?

That challenge must be worth the journey though. The law firms who get it right will have a competitive edge – on client service, and on the prospects offered to lawyers who help the firm to succeed.