Lockstep integration forces up to a fifth of US partnership out of equity; all practice areas affected
Clifford Chance is cutting up to 25 of its US partners out of equity as it battles with a post-merger restructuring of its lockstep.`The firm is in the throes of integrating the legacy Rogers & Wells partners into the Clifford Chance lockstep, and as a result has had to downgrade partners from a wide range of practice areas.`It is understood that between 20 and 25 partners are to be de-equitised, with some moving from more than 100 points on the lockstep to salaries equivalent to around 50 points. The partners at the top of lockstep, who have 100 points, will this year draw some £845,000.`On top of the de-equitisation, a handful of further partners are expected to be encouraged to take retirement.`US managing partner Jim Benedict called a preliminary meeting at the New York office 11 days ago (17 May) to unveil the plan. The move is cross-departmental and affects partners in both the New York and Washington DC offices. It is understood to include a number of legacy Clifford Chance partners as well as a majority of legacy Rogers & Wells partners.`Partners known to have been affected span the corporate, litigation and real estate departments.`The Lawyer understands that one corporate partner who is unhappy about being de-equitised is set to press for a partnership vote to contest the decision.`Clifford Chance and Rogers & Wells, which merged on 1 January 2000, are to move on to the same lockstep system from April 2002.`Before the merger, the systems were so diverse that Clifford Chance's top partners earned two and a half times as much as the bottom equity partners, while under Rogers & Wells' meritocratic system, the difference was more like ten to one.`As The Lawyer went to press, one partner said that there had been no official communication with the whole partnership about the process.`Other magic circle firms have had to grapple with similar issues in the face of merger. It is understood, for example, that many of the departures from Oppenhoff & Rädler before its merger with Linklaters & Alliance were engineered by the UK firm to make the deal more palatable.`A Clifford Chance spokes-man declined to comment.