City firm Reynolds Porter Chamberlain is to scrap the traditional flat-rate salary for newly qualified solicitors in favour of a system linked to merit and market rates. 

The firm denied that the move was motivated by cost cutting, insisting that the flat rate had ‘passed its sell-by date and no longer has any integrity’.

It said the move is the ‘final step’ in an ongoing modernisation programme and introduces the same financial reward structure that applies across the rest of the firm.

RPC managing partner Jonathan Watmough (pictured) said: ‘We’ve been rewarding all our other people – from partners to business services – based on merit and value for years now.

‘We did away with partner lockstep over a decade ago; introduced a merit-based career framework for associates in 2009, and rolled out the same programme to business services and secretaries in 2010 and 2012 respectively.’

Watmough said: ‘The concept of the flat rate has passed its sell-by date and no longer has any integrity. It does not recognise the different merits of individual NQs nor does it recognise the market variances between the different branches of law into which they will qualify.’

NQs in London at the firm currently receive £58,000 a year. Under the variable pay scale, the ‘strongest NQs, entering their careers in the most competitive areas’ of the profession, will be able to earn more.

The entry point for others will be lower than the rate that has previously been paid, however. 
Watmough said: ‘The legal profession lags well behind most other sectors when it comes to structuring the way we pay our people.

‘It makes perfect business sense for us to calibrate our salary levels based on the value particular positions offer both to clients and to our own bottom line.’

He said the move is not motivated by cost cutting, but said: ‘It just makes sense to us to reflect the merit-based approach in the rest of the firm – which is, after all, that used by most of our clients.'

In addition, he said, the firm needed to be able to show clients that it is offering good value for money from all of its lawyers.