Squire Sanders Hammonds to kick off post-merger review of partner pay
Hammonds and Squire Sanders & Dempsey are set to start integrating their practices and partner pay after securing the vote of more than 95% of their combined partnerships to launch as Squire Sanders Hammonds in the new year. The decision means Hammonds partners will be remunerated entirely on merit by 2013, in keeping with Squire Sanders' existing practice. The move to a fully merit-based system at Squire Sanders Hammonds will begin to be phased in from 2012.
November 10, 2010 at 07:40 PM
3 minute read
Merged entity to adopt US firm's merit-based remuneration system as merger goes ahead
Hammonds and Squire Sanders & Dempsey are set to start integrating their practices and partner pay after securing the vote of more than 95% of their combined partnerships to launch as Squire Sanders Hammonds in the new year.
The decision means Hammonds partners will be remunerated entirely on merit by 2013, in keeping with Squire Sanders' existing practice. The move to a fully merit-based system at Squire Sanders Hammonds will begin to be phased in from 2012.
The decision marks a departure from Hammonds' existing system, which sees the national law firm pay its fixed-share and equity partners through a mixture of performance-based pay and lockstep. The law firm has been moving further towards a performance-driven model in recent years, with currently 60% of salary based on lockstep and the remaining 40% on merit.
In contrast, both fixed-share and equity partners at Squire Sanders slot into one of around 13 bands, which can allow top earners to make more than 10 times that of a partner at the bottom, according to one former partner.
Despite the shared remuneration structure and creation of a joint bonus pool, which is likely to act as a fund to recognise partner contributions for client cross-selling between the two legacy firms, Squire Sanders Hammonds will maintain two separate partnerships and profit pools, structured as a Swiss Verein.
The combined firm, which will only operate as Squire Sanders Hammonds in jurisdictions where Hammonds has a presence, remaining as Squire Sanders & Dempsey in the US and Eastern Europe, will be a top 50 global player with around 1,275 lawyers and combined revenues of around $625m (£386m).
Squire Sanders chairman Jim Maiwurm (pictured above right) will become global chairman of the merged firm, while the US firm's managing partner, Howard Nicols, will become managing partner for the Americas and Asia. Hammonds managing partner Peter Crossley (pictured above right) will become managing partner for Europe.
The firm will have 14 practice groups and 22 sectors, with global heads expected to be confirmed in the coming weeks. It will be governed by a 13-person global board chaired by Maiwurm which will include Crossley, Nicols, six legacy Squire Sanders partners and four legacy Hammonds partners.
Crossley commented: "Clients currently working with lawyers from both legacy firms are enthusiastic about the combination's expanded practice expertise, industry knowledge, regional strength and global reach."
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Industry reaction to the merger deal
"This is a tremendous transaction which will give all practice groups, and particularly an international discipline such as tax, the ability to service clients' needs across the countries in which they are investing and growing."
Hammonds tax head Bernhard Gilbey
"I am not really sure what this brings to both firms. Hammonds had to find something, as its business model needed something else. Whether this is the answer, I am not sure
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