Equity partners called on for capital with firm set to raise £5m

CMS Cameron McKenna has called on its partners to put in additional cash, with the firm upping the amount of capital paid in by equity partners by £1,000 per equity point.

The capital increase, which was approved by a partner vote at the end of last month, affects the amount of money partners pay in when they join the equity, with all also required to make a one-off payment covering the increased cost for each of their equity points.

This means a plateau-level partner on 70 points will have to pay in an additional £70,000, while those joining the bottom of the lockstep will pay in around £30,000 more than before.

The firm would not comment on the total cost to partners per equity point either before or after the change. However, given the firm has 102 equity partners, assuming a median average of 50 points, the firm should gain at least £5m through the move.

CMS said the increase was the second part of a capital increase initially agreed upon four years ago, but that a second vote was necessary as the increase was higher than previously agreed.

The firm said in a statement: "In November 2007, the partners voted to increase the level of permanent capital to be drawn down in two instalments – one in early 2008 and the balance at a later date. Partners agreed to this second instalment being called now as the appropriate time in terms of managing our balance sheet. This… brings our capital contributions in line with our peers."

The move comes after CMS recently asked at least eight partners to leave the firm as part of a restructuring of the partnership. Some ex-partners have suggested the additional cash will be used to help fund the restructuring.

Legal Week previously reported that limited liability partnership accounts for the 2009-10 financial year showed Camerons took out a £4.5m bank loan to finance a de-equitisation round in 2010 affecting 16 partners.