A litigation boutique which specialises in complex banking and financial cases is sharing its first year profits with all staff.
City firm Signature Litigation set up in 2012 with an innovative profit-sharing scheme promising “transparency” on the firm’s financials from the outset.
Following what firm called an “impressive” opening 12 months, all staff have received a final profit award of at least 21% of their base salary.
The scheme kicks in when the firm reaches a certain budgeted fee income – triggering a bonus pool distributed between all staff.
In addition, the boutique firm rewards fee-earners for exceeding hourly targets with a further 15% bonus and there is a discretionary scheme available for exceptional contributions such as client introductions.
It means more than half of the firm’s full-time fee-earners have been awarded an extra 36% of their salary.
CEO Kevin Munslow, who is one of five non-fee earners in a total staff of 26, explained the thinking behind the firm’s structure. He said: “We thought about the best way to structure our pay and decided it was more important to have a transparent scheme.
“We are a niche firm essentially doing magic circle work in a small firm environment. It takes a leap of faith for the quality of fee-earners we want to attract to leave the safe environment of a large firm.
“This is how we attract the very best to our firm and create our unique selling point in the market, which is very high-quality specialist lawyers working on very high-value corporate disputes.
“It means we can get in the very best people on a basic salary competitive with the top end of the mid-market, but with a direct line of sight to generate substantial bonuses.”
Signature was created by former Hogan Lovells investment bank dispute resolution head Graham Huntley and fellow Hogan Lovells partner Helen Brannigan.
Clients include many of the biggest British banks and Signature was involved in the Berezovsky and Abramovich case – one of the largest international disputes of recent times.
CEO Kevin Munslow, an accountant by profession, said a comparison could be drawn with the “John Lewis style” culture of employees having a stake in the business.
He said: “Graham’s vision is to run the firm in a way where everybody is a member and to create a culture where everyone has a genuine stake in the business through profit sharing.
“Over time we may look at an ABS conversion, but in reality we are a bit young for that now.”
Not all profits are allocated out as the firm looks to build working capital. The firm has a residual profits retention policy to keep some of the money in the business – at the expense of some partner profit shares – to act as a buffer and keep the high-end litigation boutique debt-free.
Mr Munslow added: “It was exciting putting Signature Litigation together because Graham Huntley had a vision of developing a culture through a simple and transparent profit sharing scheme that captured everybody in the business.
“The strong financial performance in the start-up is not only impressive, but has vindicated our innovative approach that the partners were fully committed to.”
Signature Litigation will release its key financial statistics later in the year.