Linklaters pushes ahead with lockstep review with partner group to report back in May
Group chaired by litigation head Michael Bennett set to report back on ongoing plans to overhaul lockstep in May
December 22, 2015 at 07:03 PM
4 minute read
Linklaters partners are expecting to be given more details about the firm's ongoing review of its lockstep remuneration structure in May next year, Legal Week understands.
A working group, chaired by head of litigation Michael Bennett, is set to report back by the time of the firm's next partner conference in May. The group was set up earlier this year and tasked with examining options for reform of the firm's lockstep system.
Bennett gave an update on the group's progress at Linklaters' November partner conference in London.
One Linklaters partner said that the group is looking at "four to five perennial options" for reform.
These are understood to include issues such as increasing the flexibility of lockstep, considering the introduction of gates and opening up the lockstep at the top.
The process is still at an early stage with partners saying the result is still "very much up in the air" and describing the process as a "thought exercise."
Changes could mirror those introduced by other magic circle firms, with Freshfields Bruckhaus Deringer understood to have flexed its lockstep to accommodate the hires of US partners in New York and London and Clifford Chance overhauling its system last year to make it easier both to reward star performers and deal with those who are not pulling their weight.
Meanwhile Allen & Overy (A&O) quietly ushered in a new bonus points pool late last year that can be used to reward star partners already at the firm as well as lateral hires coming in.
According to partners at the firm there is currently no consensus within the partnership about whether flexing lockstep to hire people in the US is the right approach for Linklaters.
One partner said: "Lockstep its part of the fabric of the firm, how you address that and preserve culture and integrity is a real challenge."
Another thought there would be some resolution to the debate around lockstep within the next six to 12 months.
"You can't have those questions floating around in a firm like Linklaters for an extended period. They need to look at it and decide on this," the partner said.
The successful efforts of US firms to lure away Linklaters partners with attractive compensation packages have kept the subject of lockstep reform firmly on the agenda, with Legal Week initially reporting the firm's latest lockstep review early in 2015.
A Linklaters partner said: "The stuff that was addressed in the conference included facing up to the competition in the market and making sure the firm is properly equipped to deal with an evolving market place, which is a euphemism for US firms."
The firm has seen a string of partners quit for US firms in the last year including restructuring partner David Ereira who is set to join Paul Hastings in 2016 and head of real estate M&A Matthew Elliott, competition partner Paula Riedel and private equity partner Roger Johnson who all joined Kirkland & Ellis.
It has also made a series of hires in recent months including private equity partner Ben Rodham from Shearman & Sterling and Baker & McKenzie's global chair of dispute resolution Tom Cassels in London and Bakers' litigation partner Douglas Tween and Willkie Farr & Gallagher restructuring partner Margot Schonholtz in New York.
The firm recently appointed Gideon Moore as firm-wide manging partner and his appointment was ratified by a vote at the November partner conference. Moore gave a speech at the conference. Linklaters is set to decide on a successor for senior partner Robert Elliott early next year, with corporate partner Charlie Jacobs the favourite for the post. Elliott's term is due to end in September 2016.
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