No lockstep reform was ever going to let Freshfields Bruckhaus Deringer match Kirkland's $10m (£7.5m) a year offer for City buyout star David Higgins.

Even so, confirmation of his exit to the US firm is a blow to Freshfields, coming so soon after it revamped its remuneration model to enable it to better reward top performers.

While a handful of Freshfields' stars – and Higgins would have been among them – will now be able to make six times more than those at the bottom, this will put them on around £3m.

It's a figure which, while good even by the standards of most City law firms, is a long way off the guaranteed package on offer at Kirkland – particularly when considering Higgins is not joining as the US firm's highest earner, and that sources suggest Kirkland's profit per equity partner is likely to increase significantly next year.

Though the magic circle firm did not change its lockstep simply to keep Higgins, it's fair to say he was a driving force in the overhaul, pushing for change that would effectively bump up pay for a small number of stars, while lowering pay for others.

"Freshfields will be very disappointed because he drove a huge amount of change and division internally," says one City private equity partner of the timing of Higgins' move. "The firm has flexed its lockstep massively more than any other magic circle firm, and he has turned around and said it is not enough.

"I think it leaves a bad taste after all the tension and pushiness. Junior partners have seen a senior partner go round and tell them that the firm needs fixing and needs to change its lockstep. He's been incredibly vocal about it and now he is leaving."

A former Freshfields partner adds: "He was on the more aggressive end of the spectrum of lockstep change. It is not the first time we thought he might go, but Freshfields is never going to give anyone a deal that is $10m guaranteed. If you're going to lose someone like that anyway, maybe you shouldn't compromise the system for it."

The money may well have been the biggest attraction of Kirkland, but sources both inside and outside the firm suggest Higgins was also frustrated because he wanted a management position that was not on offer at present at Freshfields, and, according to some, would have been unlikely to happen.

"He always had management aspirations, but was a bit like Marmite at Freshfields," says one buyout partner. "He's a divisive character," says another source.

On top of the shadow Higgins' exit casts over Freshfields' lockstep reform, it also raises questions about the firm's private equity practice, which will be left in the hands of co-head Adrian Maguire.

Higgins has at least two key PE clients in common with Kirkland – Cinven and Blackstone – as well as a wider client list that includes Canada Pension Plan Investment Board, Hellman & Friedman, The Carlyle Group and GIC.

Many of these relationships are more closely aligned with the firm than Higgins, however, prompting some to predict that while some work may move with Higgins, the bulk will not.

As one partner comments: "Freshfields is good at sharing clients around so I don't think they will lose anyone overnight. They have some really good people other than David, so I suspect they won't lose too many clients. I don't think Kirkland is hiring him for his book of business – he has a stellar personal reputation, but medium to low portable clients."

However, given Higgins is the first really big-name partner to be prised out of the team for a rival firm, Freshfields' ability to retain these clients in the longer term will depend on its ability to prevent others – such as Maguire – from heading towards the door now the seal has been broken.

While few firms could match the package on offer at Kirkland beating Freshfields' £3m figure would be less challenging, particularly after a bruising period both financially and culturally at the UK firm.

Despite Higgins' departure, Freshfields' private equity practice still has a lot going for it. For Kirkland, however, he offers the top name UK partner the PE practice it lacked in London.

One buyout partner says: "It's a good move for Kirkland and signals a change in pace for the firm, which will gain a more English-facing PE practice. It will reawaken the market."

Another adds: "It's a great move. For Higgins to bring in the $30m needed to justify a $10m package is more than possible at Kirkland."

One Kirkland partner agrees, describing the hire as "a monumental coup". He adds: "Higgins was Freshfields' main private equity guy. He was very senior – one of the key people at the senior end of private equity in Europe."