Partners to vote on axing salaried partner layer and stretching lockstep at lower and upper ends
Clifford Chance is set to unveil radical proposals which could see the firm become an all-equity partnership as part of its overhaul of the global lockstep.Clifford Chance is set to unveil radical proposals which could see the firm become an all-equity partnership as part of its overhaul of the global lockstep.
The lockstep review committee, led by real estate head Cliff McAuley, has drawn up a plan that will be put to a partnership vote in the autumn. The Lawyer understands that any proposed move to an all-equity partnership will be conditional on stretching the global lockstep.
The Clifford Chance ladder currently runs from 40 to 100 units. One partner at the firm told The Lawyer: "Instead of having salaried partners we would create more rungs before 40 points.
"We're trying to have a global lockstep with enough flexibility to cope with mature markets, differentials within markets and investment in new markets. [The current system] limits our ability to grow."
Under the plan, some jurisdictions may opt in to a lower ladder. That decision would be devolved to the local partnerships and not imposed centrally.
A source close to the process said: "There may also be a gateway at 100 units to an upper ladder."
The lockstep review committee is currently taking soundings with European managing partners, the partnership board and key opinion-formers within the firm. The proposal will be unveiled to the partnership before the end of June.
The status of non-equity partners has been a thorny issue at the magic circle firm over the last couple of years. In August 2003, salaried partners convened a meeting with management to complain about the extension of the salaried partner term from two to three years. However, a year later the salaried partners won concessions from the management and got a simplified system for reaching equity.
At the end of the 2003-04 financial year, Clifford Chance had 626 partners worldwide, of whom 406 were equity.