Lovells' year-long lockstep review ends in deadlock as partnership vote is split
Lovells is closing the door on its controversial lockstep review after partners narrowly decided against making radical changes to the firm's lockstep.
February 14, 2007 at 10:22 PM
3 minute read
Lovells is closing the door on its controversial lockstep review after partners narrowly decided against making radical changes to the firm's lockstep.
The majority of the partners (52%) are understood to have been in favour of bringing in powers to move partners up the lockstep and around 50% of the partners who voted were also in favour of more far-reaching proposals to increase the top end of the lockstep from its current 60-point plateau to about 75.
However, as the firm needed a significant majority to bring in the changes senior partner John Young told partners last week that they will not be happening, despite a protracted review lasting nearly a year.
The decision by the partnership council, first reported on legalweek.com (9 February), follows months of consultations in local offices as well as a firm-wide survey of the partnership carried out at the end of January when overall opinion became clear.
The most significant issue under discussion was whether to increase flexibility at the top of the lockstep with either an additional band of points above the current 60-point plateau or bonus points.
The council decided against such a move and ruled out a controversial proposal that would have made it possible to pay partners in the US outside the current lockstep in exceptional circumstances.
One Lovells partner told Legal Week: "Half the partners were for it and half against, so a lot of people will be unhappy. I do not think you can manage a firm like ours, which is having difficulty growing the business, without offering them the opportunity to make a lot of money."
However the firm is putting together a formal proposal for a one-off points increase for laterals if there has been a particularly strong performance. More significantly, it is also changing the entry level for junior partners.
Partners will now enter the equity on 30 points rather than 24 – reducing the lockstep to 10 years assuming a three-point increase each year. Partners who have come in on less than 30 points over the last six years will also see their points adjusted to correspond.
Young told Legal Week: "It was clear we did not have the support to bring in the changes [at the top end] but those at the bottom end should not be underestimated. It is a very significant change for junior partners and, I think, overdue."
Lovells held its original lockstep review in 2004-05 but last year announced a second consultation in the wake of a stream of big name partner departures including Marco Compagnoni and Derek Baird to Weil Gotshal & Manges and Allen & Overy respectively.
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