Regional rebellion blocks Addleshaws equity rejig
Backlash as partners baulk at uncertainty of proposed system
Paul Devitt
Addleshaw Goddard’s management has been forced to shelve plans to radically overhaul the firm’s equity structure after a backlash from regional partners.
The firm’s partnership was due to vote on the proposed changes at a partner meeting on Friday (20 May), but managing partner Paul Devitt and senior partner Monica Burch were forced to pull the item from the agenda following opposition from elements of the partnership, understood to be mainly partners based outside London.
Under the proposed scheme the firm would have ditched its partial lockstep and replaced it with a more merit-based system.
Equity partners would have been divided into two categories, with those in each camp starting with a fixed number of points. At the end of every financial year partners would end up with differing amounts of equity points, based on performance.
At present, the firm has a lockstep in place for the first three years of partnership and thereafter points are awarded according to merit.
According to a source at the firm the new structure was seen as too uncertain by some partners, making it difficult for them to financially plan for the year.
A spokesperson for the firm would not comment on the meeting but said in a statement: “We’ve talked for some time as a partnership about our desire to continue to reinforce a meritocratic and dynamic approach to remuneration.
“That could involve a changed remuneration model, and we’ve proposed one for partners’ consideration. We did initially intend to have full discussion and decision on that on Friday, but we want to take more time to debate it, and will be consulting with partners over the next few months.”
It is understood that at the meeting partners also voted on whether the firm should amalgamate its governance board and management committee into a single entity.
The spokesperson added: “We need to make changes and improvements to take advantage of the new environment we are operating in, which is one of increased opportunity and increased busyness and yet also one of fierce competition, where there’s a need to deliver differently and better for our clients.
“We’ll be talking to partners about ways in which we can become leaner, more agile and more market-focused in our leadership, with a view to increasing partner visibility with clients and in our chosen markets.”
Readers' comments (5)
Anonymous | 23-May-2011 12:00 pm
Is this Trouble at Mill - Addleshaws in the past were excellent ( Mark & Paul particularly) at getting it right first time and avoiding adverse publicity.
Not sure if the reality is some of the new partners with limited experience of the culture are trying to flex muscle and feel they are carrying the old guard.
It would appear the judgement call was simply wrong.
Only time will tell.
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Anonymous | 23-May-2011 12:14 pm
It is the same old story, If you expect partners to retain their enthusiasm for their vocation and ability to inspire and lead those they work with you cannot mess the partners about and make their personal earnings and finances uncertain.
The final quote is just management waffle. Clients must wet themselves with laughter reading such tosh. It is the sort of management speak that should, along with "management tools" like '360 appraisals' and 'unbalanced scorecards', be banished from the workplace back to the Business School lecture theatre/playground.
Partners are otherwise destined to become an type of new awkardly remunerated hourly paid workers, taken to its logical conclusion . Is that a step back or forwards?
MBA - Means B*gg%r-All
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Anonymous | 23-May-2011 1:36 pm
Well Said Anonymous @ 12.14 .
Addleshaws get back to basics and stop being influenced by management speak / consultant waffle.
Will someone fall on the sword for this !
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A.Bagov | 23-May-2011 3:59 pm
Fancy management talk for "Piece work" if you ask me. Nothing wrong with a bit of ard graft!
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Anonymous | 24-May-2011 4:23 pm
to anonymous. all of the "management tools" to which you refer are frequently found (and often used with positive effect) in the wider business world. these tools have been used for a good time in the corporate sector but are only now becoming prevalent in law firms. is the suggestion that such tools should be “banished” as the legal sector has nothing to learn from the wider business community? It also seems pretty poor form to knock addleshaws for using the same language that many of their clients will be familiar with and use themselves. Law is a business after all. Run it like a business. If lawyers can’t understand the same kind of language and concepts that their own commercial clients use, poor clients!!
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