Clifford Chance confirms German exits as firm launches lockstep review
A number of German partners are to leave the firm following the firm's largest branch review in years as firm separately kicks off global lockstep review
January 26, 2015 at 08:32 AM
3 minute read
Clifford Chance (CC) has confirmed several partner exits in Germany are underway following its largest regional review in years, with the exits coming as the firm has kicked off a review of its firm-wide partner remuneration.
The magic circle firm declined to comment on how many partners have already left but said the exits followed the conclusion of a review of the practice led by German head Peter Dieners.
Legal Week reported in December that up to nine partners across the firm's offices in Munich, Frankfurt and Duesseldorf would leave as a result of corporate partner Dieners' review. In December the firm had 83 partners across Germany.
One former partner said CC had been finding it difficult to maintain profitiability in Germany and suggested that one way around the issue would be to reduce the maximum top of the lockstep available to partners in Germany, though the firm declined to comment on this.
The firm currently has a three-tier lockstep system with a lower scale available for less profitable jurisdictions, a core lockstep capped at 100 points for most partners, with a third option – with a far higher potential maximum – available only to those in the US, though it is understood the super-point tier has never been used.
CC's entire lockstep structure is currently under review in a move which could see partner pay amended in a bid to better align performance with reward.
The early stage review has yet to result in any formal proposals being given to partners.
Managing partner Matthew Layton told Legal Week in an interview earlier this month that the firm's lockstep remuneration model was one area up for change in its new strategic plan which sets out the firm's vision for the next 10 years.
The firm is set to address flexibility within the system, as well as more generally looking at monitoring lawyer performance in line with the new strategy.
In order to ensure buy-in from lawyers and staff, the firm will be looking to measure performance against the new strategy and targets. As part of this the firm's lockstep remuneration structure could be amended, though there are no plans to move to merit-based pay for partners.
"We already have flexibility in our lockstep and we could consider how it is used or appropriate changes – we need to ensure that lockstep is fit for purpose and supports the strategy and its implementation."
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