CC to strengthen hand to exit under-performing partners
Clifford Chance (CC) is consulting partners on plans to amend its termination policy to allow a quicker exit for restructured partners by cutting their so-called improvement period. The consultation was launched in April with a memo sent out to partners proposing the partnership deed be amended to allow management to shorten the consultation period and lengthen the notice period in some partner terminations.
May 08, 2012 at 09:09 AM
2 minute read
Clifford Chance (CC) is consulting partners on plans to amend its termination policy to allow a quicker exit for restructured partners by cutting their so-called improvement period.
The consultation was launched in April with a memo sent out to partners proposing the partnership deed be amended to allow management to shorten the consultation period and lengthen the notice period in some partner terminations.
The measures would form an alternative route to the current system whereby all exited partners are first given an improvement period spanning nine to 12 months, during which they are compensated to the end of the 12 month period.
That route will remain for partners who management view as having prospects to improve, while for others they would instead be able to opt for instant termination by giving them three months' notice followed by nine months with compensation. The move has been touted as helping to avoid having disenfranchised partners working in the firm for prolonged periods.
If the proposals are received favourably by the partnership in the consultation, the amendment will not require a partner vote.
CC said in a statement: "From time to time the firm reviews all of the policies in the partnership agreement. At present we are consulting with partners on possible changes to how partner performance is managed to bring the firm into line with best practice elsewhere in the industry."
The firm added that the consultation does not mean that it is about to embark on a partnership restructuring and denied that there is an on-going restructuring process.
One partner told Legal Week: "It's basically a tweak to the termination policy which puts the horse in front of the wagon instead of the wagon in front of the horse. On balance you'd prefer to let the axe fall quickly if you had decided to exit a partner."
CC's move comes after Linklaters last month confirmed details of its partnership restructuring, which saw 25 partners depart from the firm. So far, CC's other magic circle rivals have avoided embarking on the kind of wide-scale restructurings seen at many major law firms in 2009.
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