Dechert has caught up with its peers among the transatlantic merged firms by overhauling partner remuneration in London to bring it in line with the US
The firm has just finished resetting its compensation on an international basis for the first time, two years after the transatlantic merger of Titmuss Sainer Dechert and Dechert Price & Rhoads. The new equity spread under the US merit-based system has been widened significantly from Titmuss Sainer's old spread. It jumps to approximately 4.5-1, excluding an annual bonus element, from around 2.5-1 prior to merger. London recorded a turnover of £45.5m for 2001 against a firmwide income of £238m. The new system places a discretion with the firm's policy committee with effect from 1 January in every second year to determine the remuneration of all partners in all offices for the next two years. The 12-strong policy committee, which has three European seats, also sets bonuses every year for partners whose performance has been extraordinary. The committee's recommendation is based on intense consultation with all partners and is subject to ratification by the partners. The new system marks the end of modified lockstep for Dechert in London. The Lawyer can reveal that Titmuss Sainer first moved away from a system of lockstep with a bonus pot six months prior to its merger. A partner vote on this interim system was tied to the merger vote. Partners gained half of the points they previously had through seniority, but also had to rate every other partner in a matrix of 10 qualities, such as recognition in the market, billing and client winning. A joint remuneration committee moderated the results to give a new cut. Partners knew that the system would then change again in 2002. Dechert's latest remuneration change brings it up to speed with other recent transatlantic mergers. Niche City firm Rakisons went straight into the US system of Steptoe & Johnson when the two firms merged in December 2000. When Reed Smith merged with Warner Cranston last year, remuneration was set for individual UK partners for 2001 as a run-up to a full remuneration review process based on performance, which has now been completed.