Decision on non-equity partners postponed till 2006 as management buys back Cadwalader defector
In a sign of increasing nervousness on the part of the Clifford Chance management, the firm's lockstep review group has shelved its ballot on whether it should keep the non-equity partner layer and has split the review into three proposals, each to be voted on next month.
According to an internal announcement, which was made by managing partner Peter Cornell on Friday 25 November, the partnership will now vote separately on three strands.
The first ballot will be on 'ladder one', which is the reduced points allocation for economically weaker jurisdictions. The second vote will be on 'ladder three', the proposal introducing extra profit units for certain offices that has caused considerable discussion in both London and New York. The third, and least controversial, vote will be on the three-yearly reviews of partners.
While the Clifford Chance votes will take place a week from today, the decision on the status of junior partners has been put off indefinitely. One partner said: "We want more time to consider that aspect. There's a whole range of views on the non-equity piece."
Although the lockstep review process has been under discussion for most of the year, Clifford Chance's management is understood to be reluctant to put the proposals to a vote before reaching a consensus, especially after the last lockstep reform proposals were rejected by a whisker in October 2003.
The length of time junior partners serve before being admitted to the equity has become the most controversial issue of all. It has been highlighted by Clifford Chance's loss of junior tax partner James Anderson to Skadden Arps Slate Meagher & Flom's London office earlier this year, and also by the firm's successful buy-back of junior tax partner Michael Brosnahan last week.
New Zealander Brosnahan became a partner at Clifford Chance in 2003. Last month he resigned to join Cadwalader's London office, but has since opted to stay with Clifford Chance. The firm strongly denied speculation of equity acceleration, but other sources close to the situation claimed Brosnahan had been offered improved circumstances to stay.
Clifford Chance's tax group has suffered a spate of losses in recent months, including that of senior associate Kevin Conway, who resigned last week to join Atlanta firm King & Spalding's London office as its first tax partner.