Partners at Pogust Goodhead recently made a $550m investment deal with an American fund manager – the biggest investment ever in an English law firm.

The firm has now launched what it calls a “synthetic equity programme”, in which junior lawyers will be paid on a shareholder model. It said it would create a £200m bonus pool to run over the three-year investment deal struck with Connecticut-based investor Gramercy.

The firm specialises in group actions and has represented consumers affected by the Volkswagen emission scandal.

Tom Goodhead, 41, chief executive of the firm, told The Times that Pogust Goodhead wanted to match pay for its best lawyers with “their contemporaries at other hedge funds or investment banks”.

He said that staff at the firm were “doing more socially valuable work than lawyers at other law firms… and so I see no issue in ensuring they are paid on a par with people that invest in us. This is something deliberate that we’re doing. The potential of doing this type of work means that the incentives will be much higher than they can be in the magic circle law firms and it is something we are doing to shake up the market.”

Mr Goodhead said he could see partners earning between £10m and £20m from the bonus pool, while NQs would earn between £1m and £2m.