DLA Piper issues proposals to move to all-equity partnership
DLA Piper is to consult with partners on proposals expected to see the firm usher in an all-equity partnership across all of its offices outside the US. Proposals were unveiled to partners this week (17 October), with a consultation due to begin next month. Partners are expected to vote on the plans early in 2012, with the move to a single all-equity partnership across the whole of DLA Piper International, which includes offices in the UK, Europe, Middle East and Asia, likely to take place from 1 May next year.
October 19, 2011 at 07:03 PM
3 minute read
DLA Piper is to consult with partners on proposals expected to see the firm usher in an all-equity partnership across all of its offices outside the US.
Proposals were unveiled to partners this week (17 October), with a consultation due to begin next month. Partners are expected to vote on the plans early in 2012, with the move to a single all-equity partnership across the whole of DLA Piper International, which includes offices in the UK, Europe, Middle East and Asia, likely to take place from 1 May next year.
The firm currently operates a three-tier partnership across the offices, comprising two bands of fixed-share partners and an equity rank. At the close of 2010-11 only 200 of its more than 600 partners were in the equity.
The overhaul will see both fixed-share ranks axed, with partners paying in a percentage of their current salaries in order to join the equity. Some partners within the firm suggest contributions could equal at least 50% of salaries. In return they will gain a direct stake in the firm's overall profitability as well as full voting rights.
UK regional managing partner and executive member David Bradley told Legal Week: "What we propose to do is remove the fixed-share gates and have one class of partner. We're a large partnership with an expansive international footprint and to align all of our offices and all of our people can only be a good thing for the performance of the firm."
Bradley would not say how much capital the firm expected to raise or confirm the level of individual contributions, but denied that the primary aim was to increase capital or reduce debt.
One ex-partner said that the firm's model needed to change to address a low-growth environment. He commented: "The fixed cost of hundreds of salaried partners is a huge burden in a recession."
The move is set to bring the international side of the business in line with DLA's US operation, where 275 salaried partners were asked to contribute up to $150,000 (£95,300) each in late 2008 in return for a direct stake in the firm's profits.
Bradley added: "We will support partners currently at the lower earnings levels with transitional arrangements and safeguard certain levels of income up to certain threshold that will be the subject of consultation."
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