BLP mulls overhaul of partner exit process as governance review continues
Berwin Leighton Paisner could take decisions on partner exits out of the hands of the wider partnership in a move that would effectively increase the power of the firm's management team.
September 09, 2014 at 07:08 PM
4 minute read
Berwin Leighton Paisner (BLP) could take decisions on partner exits out of the hands of the wider partnership in a move that would effectively increase the power of the firm's management team.
The City firm is consulting the partnership on a range of governance issues, with one aim being to streamline and improve the process of managing out underperforming partners.
Draft proposals include creating a standalone committee to ratify and process decisions on partner exits, which are currently voted on individually by all equity partners at the firm. The consultation is also looking at how partners may be able to appeal against decisions made under any proposed new system.
The consultation has no fixed end-date but is expected to come to a conclusion later in the autumn. Any changes to the partnership deed, if proposed, would need to be voted in by the full partnership.
A spokesperson for BLP confirmed it is "currently consulting partners on a number of matters" but declined to comment on further details.
If the firm goes ahead with the proposed changes it would represent a shift to a more corporate structure, centralising more decision making powers with the firm's leadership team.
One BLP partner said he was "very much in favour" of a potential rebalance in power, since an increase in top-level influence would enable the leadership team to drive the business forward more efficiently.
However a former partner said that some of the proposal were "causing controversy and meeting resistance from partners".
The ex-partner added: "Personally I don't think the idea of an independent committee is workable and would create a lot of tension. Partners do not seem to have been given the appropriate level of respect, which is the fundamental problem."
BLP has been undergoing a period of transformation over the past 12 months. The consultation follows a string of structural reviews including a number of practice reorganisations which will take effect in the spring, a strategy review conducted at the end of last year by executive chairman Robert MacGregor, an independent review of the finance department carried out by Jomati consultant Tony Williams, and a redundancy programme last May.
And with Neville Eisenberg's (pictured) current term as managing partner drawing to a close next May, there is potential for even more change to come.
The partnership itself has taken on a leaner shape after BLP forced out several senior lawyers in the past year, with the exits occurring alongside a number of voluntary departures over the same period. The firm saw average equity partner count drop by 10.1% year-on-year to 91.6 for 2013-14. This ties in with recent research by Legal Week, which found that 9% of BLP's total partnership left the firm during 2013-14.
The finance practice has taken the brunt of partner exits, with notable departures including former RBS restructuring head Matthew Kellett, who was BLP's head of finance at the time and has since joined EY, restructuring head Ben Larkin, who joined Jones Day in February, and a trio of real estate finance partners, led by then-head of real estate finance Laurence Rogers, to DLA Piper in the same month.
Despite these exits, the reorganisation appears to be working in the firm's favour if the numbers are anything to go by. While BLP shed several partners its revenue and profit figures significantly improved during the same period, with revenue for 2013-14 growing by 5.8% to £246.5m and profit per equity partner (PEP) leaping by 35.2% to £542,000. The results follow a rocky year in 2012-13 in which it posted a 5% fall in revenue and a PEP drop of 39%.
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