Blake Lapthorn has abandoned its lockstep after its average profit per equity partner (PEP) figure fell by 68 per cent last year, dropping to £65,000 from last year’s £204,000.
In a major overhaul of its partnership structure the south coast firm has shed around a quarter of its equity partners and discarded its lockstep in favour of a merit-based system.
As revealed by The Lawyer last week (27 July), Blake Lapthorn’s profitability has fallen to such an extent that some associates are earning more than equity partners.
Equity partners will now be assessed once a year and awarded between five and 100 points.
The firm had previously operated a traditional lockstep, with partners progressing through five equity bands.
Managing partner Walter Cha said the changes were to “recognise the uneven contributions within the partnership”.
The firm also shrank the equity at the end of the 2008-09 financial year. There are now 36 equity partners within a total partnership of 110, down from 48 at the end of April.
Cha said the reduction was the result of a combination of de-equitisation and partners leaving the firm.
Blake Lapthorn is also considering implementing flexible working in the form of a four-day week in a bid to drive down costs without cutting more jobs. It has already been through two rounds of redundancies.