CMS Cameron McKenna

UK 200 RESULTS 2010

Few firms can have experienced as incident-packed a year as CMS Cameron McKenna. It started with the introduction of a redundancy-busting flexible working scheme. It ended with the firm in the throes of negotiating potentially the biggest legal process outsourcing deal in the City.

Avoiding the previous year’s redundancies (43 fee-earners lost their jobs) has been a key priority for managing partner Duncan Weston, who has continued his crusade to reshape the firm. Camerons introduced its flexible working arrangement at the beginning of the 2009-10 financial year, with as many as 90 per cent of staff either accepting shorter weeks or taking unpaid leave.

The result was that no more job losses were necessary, but turnover was affected. Fee income dropped by 11 per cent to £214.4m, while average profit per equity partner fell by 18 per cent to £453,000.

With 16 partners being taken out of the equity at the end of 2008-09 and a total of 21 fewer equity partners on a full-time equivalent basis in 2009-10, net profit also suffered, falling from £68m to £45.7m. The drop in profitability came despite an ongoing drive at the firm to reduce costs.

This drive will continue apace during the current year as the details of Project Skylark – an outsourcing arrangement with Integreon – are finalised. Due to go live in the autumn, the project could see as much as 90 per cent of the firm’s support functions outsourced.

Surprisingly, given the carnage across the market over the past two years, Camerons’ corporate practice performed well, posting a second consecutive rise in turnover. The firm was helped by a vibrant energy sector, while its life sciences and technology, media and telecoms departments also had a good year.

A high point for the firm was winning a place on the coveted BT global panel. Another

big mandate came with its continued work for RWE on the disposal of the UK’s nuclear power sites.

Camerons operates what amounts to a three-tiered partner structure. At the lowest level are ‘office partners’, who are not included in the total partner figure of 141 given by the firm, and who are effectively senior associates with more responsibility. They are promoted to a three-year gateway level before progressing to the full lockstep, which has nine levels with a plateau of 70 points. The equity spread in 2009-10 topped out at £501,000, down from £644,000 in 2008-09.

UK 200 RESULTS 2009

The Duncan Weston revolution continues at CMS Cameron McKenna. In his first full year as managing partner Weston has reshaped the firm.

Gone is the insurance group, which relaunched in November as a dispute resolution practice. The old-fashioned lockstep is out, replaced with a multi-tiered partnership. And there is a new-look executive structure, with the firm governed by a single enlarged management board comprising 15 members.

Amid all the upheaval Camerons has continued to make steady progress in terms of financial performance. Helped by Euro billings from its market-leading Eastern Europe practice, revenue increased slightly to £240m. The corporate practice had a good year in spite of the turmoil in the markets, with deal turnover up by 4 per cent to £105m, while the renewed focus on litigation has come at the right time, with the practice returning some £50m in 2008-09.

Profitability did fall: average profit per equity partner (PEP) was down by 15 per cent to £554,000, and Weston responded with a raft of measures to reduce the cost base.

Alongside 73 redundancies at the end of the financial year the firm has launched a reduced working scheme allowing staff to be put on four-day weeks or two-week sabbaticals. It will remain in place for 18 months.

The new partnership structure was put in place to make the process more transparent and highlight the best candidates. All new partners now enter a salaried rung, dubbed ‘office partner’, which is essentially a senior associate role with added responsibilities. After this they can be promoted to gateway partner, a position occupied for three years on a fixed salary with a performance top-up.

Equity partners join the eight-year lockstep at a lower level than last year on 10 points, currently worth £231,000. Last year new equity partners started on 28 points, or £314,000. The plateau level remains at 70 points.

As part of the new partnership structure Camerons persuaded 16 partners to volunteer for de-equitisation. They took up new fixed-share roles, a position that is being offered from this year as an alternative equity partner.