Baker McKenzie Taking 'Longer than Usual' to Pay Back Capital Loans, Former Partners Say
Two former UK partners had expected to be paid within 18 months of leaving, but are yet to receive their capital.
June 04, 2020 at 05:15 AM
2 minute read
Baker McKenzie is taking longer than usual to pay back its former partners' capital contributions, according to two ex-partners who have been affected.
One former partner, who had been based in the firm's London office and who left the firm around two years ago, says that he was initially told it would take up to 18 months for him to receive his capital contribution, paid when he joined the firm's partnership.
However, he has now been told he will now receive the amount back within three years.
A second former London partner, who also left within the last two years said: "I was told it would take longer than the usual 18 months for me to be paid back. I don't know how long it will take."
The maximum amount of time that the firm can take to pay back partners' capital is 36 months from the date of their departure, according to a person with knowledge of the partnership agreement.
But usually, the firm pays back the amount within half that time, according to another two former partners who left the firm several years ago.
One of the partners currently awaiting their capital speculated that the delay may be due to economic pressures due to COVID-19.
A spokesperson for the firm said: "Our policy is to return capital to former partners within 36 months but to consider earlier return on an individual, case by case basis. Our approach in applying that policy has not changed as a result of Covid-19."
Several firms have taken various measures to combat the financial implications of the COVID-19 pandemic.
Allen & Overy, Ashurst, BCLP, Cadwalader, Wickersham & Taft and Clifford Chance are among the global firms to delay or cut their partner profit distributions in response to the crisis, which has seen firms scrambling to protect their cash flow.
Read more:
US Firm Makes London Associate Redundancies, Citing COVID-19
Reed Smith To Lay Off London Lawyers, Extend Salary Cuts and Trim Workweeks
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