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Shift away from guaranteed deals for high-profile lateral hires
Berwin Leighton Paisner (BLP) is ditching its long-term strategy of hiring prominent partners on guaranteed pay deals in favour of a single remuneration system for all those in the equity.
The firm’s willingness to dig deep for a succession of big-name hires in the past several years is viewed by the market as a cornerstone of its current success. It is understood that several high-profile names - including real estate lawyers Chris de Pury, Robert MacGregor and James Knox and private equity heavyweight Raymond McKeeve - joined the firm with guaranteed incomes in excess of £1m.
Last month BLP posted a rise in average profit per equity partner (PEP) of 56 per cent, from £455,000 to £712,000, on the back of a turnover rise of 20 per cent (£229m) for the past financial year.
The disparity between the incomes of the firm’s star lawyers and those that have been at BLP for many years is understood to be among the reasons it has overhauled its remuneration structure.
“We’ll be more reluctant going forward to hire people on special deals,” confirmed one BLP partner. “We still will for the right person but the deals are more likely to be linked to performance than they were in the past. It’s a new philosophy and it’s starting now.”
A firm spokesperson said: “Guarantees are not completely off the table but higher profits tend to make them less necessary.”
Asked about the move, one recruitment consultant commented: “This is nothing but semantics. It’s a PR exercise they have to do because the special deals have p*ssed off so many of the other partners.”
Separately, BLP’s astonishing PEP figure has led critics to suggest the increase is the result of a programme of de-equitisations and exits.
One BLP partner told The Lawyer that as part of a realignment of its business, the firm was reassessing its partnership.
“The increase in profitability has involved dealing with partners whose genetic makeup doesn’t fit with the firm’s direction of travel,” said the partner. “Some partners have agreed to step out of the equity, while others have left the firm.”