Shearman & Sterling is considering demoting some of its equity partners in a bid to boost profitability and focus the business around priority practice areas, Legal Week understands.

Partners inside the firm told Legal Week the issue is expected to be discussed tomorrow (21 September) at a meeting between the firm's global and regional managers in New York. It is understood that partners in less profitable practice areas and regions will be most affected, though the details of the plans are not yet clear.

If approved by the larger management group, a cull of the equity ranks could be implemented during the annual compensation period next January. Other more immediate changes could include a reduction in the number of practice group heads.

"There is a desire within the partnership to make sure that every equity partner is in fact putting in the time and effort and driving the business," said a current Shearman partner, who requested anonymity in order to speak freely about firm matters.

Another partner said: "It wouldn't surprise me if Asia or the US were affected by any changes. I don't think it's any secret that most firms struggle to make money in Asia, unless their partners are on some sort of salaried structure. It's no secret the firm has struggled with underperforming partners and areas. There are real challenges at the firm."

Shearman partners with knowledge of the plan said the firm's leaders have been searching for a few years to trim the ranks of unproductive partners. But they have been hamstrung by the firm's partnership agreement, which requires that a supermajority of 75% of equity partners approve a partner's removal from the equity partnership.

"It never happens," said one current partner. "This has been a major problem for the firm." It is possible, however, to de-equitise a Shearman partner with his or her consent. And management does have potential sticks at its disposal to encourage that consent: leaders are authorised to trim equity partner compensation annually by as much as 25%.

In a statement, a Shearman spokesperson said: "As with all firms, we regularly review how and where we invest equity and manage headcount."

The move has taken on increasing urgency in the past few months, with news of the potential departure of a top antitrust group in Brussels for Quinn Emanuel Urquhart & Sullivan, as well as the June departure of three top M&A partners in San Francisco for Paul Hastings.

Partners have grown frustrated at the firm's stalled growth. After two strong years in 2013 and 2014, average profits per equity partner fell nearly 4% in 2015, to $1.8m, while gross revenues grew just under 2% last year, to $860.5m. Two inside sources at Shearman said this year that demand has been flat.

The 839-lawyer firm had 162 equity partners and 26 fixed-share partners last year. Under Am Law 100 guidelines, the fixed-share partners are counted as non-equity partners, though they have full voting rights and Shearman considers them equity partners.

Meanwhile, the firm has continued to grow its younger tier of partners. It has promoted 25 partners within the past two years, many to fixed-share status.

If Shearman does move toward de-equitisation, it would not be the first time the firm has used powerful measures to cull its equity partnership. In 2005, the firm made waves by encouraging underproductive partners to leave in what were then labelled 'Shearminations'.