A new survey of the legal profession has found significant differences between how solicitors are assessed and how they are rewarded.

The poll, conducted by accountants and financial advisers Armstrong Watson, reflected a disconnect between the factors that law firms consider most important for growth, and the measures used for remunerating partners and fee earners.

Individual performances were assessed not just on the profitability of the firm and departments but also on fees billed and – in some cases – efforts to improve lock up and actually recover fees.

But when it comes to rewarding partners and fee earners, seniority and firm-wide performance were more significant than they had been in appraisals, with factors such as lock up considered much less important.

Tom Blandford, legal sector director for Armstrong Watson, said: ‘In general, firms believe that performance related pay (especially for partners) is the best model, however they seem to fall into basing remuneration on the same blunt measures (eg fees billed) that have been popular for many years rather than more bespoke and balanced measures.’

Blandford said firms should be looking to reward staff based on cash receipts rather than invoices sent out the door, and cross referrals and firm-wide improvement initiatives by individuals rather than the nebulous ‘firm wide profitability’.

More than half (57%) of the 41 firms that responded to the survey do not have recurring annual pay rises, and of those that do the average annual increase this year was 3%.

Opinion was split about the importance of pay in attracting new staff, with 52% agreeing it was the key factor, but other respondents favouring work-life balance or other benefits such as pensions.

Blandford said the indications are that progressive firms are changing the way they remunerate all staff and the way they generate new business.