Firm streamlines partnership structure and tightens management

CMS Cameron McKenna has overhauled its partnership structure, speeding up the time it takes for junior partners to join the equity and allowing them to progress more quickly through the lockstep once there.

The firm has scrapped its salaried partner rank to create a two-tier partnership comprising fixed-share and full-equity partners, with the overhaul set to see around 65 salaried partners (currently known as office partners) putting in capital to join a single 75-strong fixed-share rank.

The overhaul, which was voted in last month and will launch on 1 May, will also shorten the time it takes junior partners to join the equity by one year. At present, newly promoted lawyers spend three years as office partners, followed by at least two years as fixed-share (known as 'gateway') partners. Partners will now spend at least four years in the new fixed-share band before joining the equity.

Senior partner Dick Tyler (pictured) said: "The new model is a result of an 18-month consultation across the partnership, and has been designed to promote, incentivise and reward the types of contribution and behaviour that will deliver sustained, profitable revenue growth and long-term competitive advantage. We believe the new model will have a direct impact on our ability to drive growth in our business."

The firm has also changed aspects of its full equity lockstep to allow junior partners to progress more rapidly through the pay ladder on one hand while, on the other, increasing management's ability to hold the progression of more senior partners depending on performance.

The ladder will continue to run from 28 points to a 70-point plateau, with partners moving up by six points a year for seven years, assuming progression is not delayed.

As part of the overhaul and to improve management's control of the equity, all partners will see performance and position formally reviewed when they join the equity and then every three years as they progress through the lockstep, with the firm able to hold partners at these points, slow their progress or accelerate it.

Tyler added: "We felt the new system would be more reflective of the progression that partners make on the lockstep. In the case of younger equity partners, they gain a greater reward sooner, which we think is a good thing.

"We previously had the capacity to hold people on the lockstep, but the process hasn't been as transparent as it will be. It was previously done on an ad hoc basis.

"We now have greater clarity about when people can expect to be reviewed, and, within that, a formalised capacity to accelerate or pause a partner's progression up the lockstep."

As partners transition into the new system, some will see a one-off acceleration of their progress through the equity over the next two years.

CMS Cameron McKenna introduced its gateway partner level in 2007, with the first four gateway partners accepted into the equity in 2010. At the close of the 2011-12 financial year the firm had 193 partners, of which 97 were full equity. Average profits per equity partner stood at £534,000.

Related: CMS accounts reveal £7.7m capital contributions boost in 2011-12.