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Ashurst has moved six partners down from its so-called super-plateau, marking the first time that the firm has removed members from the 65-point level since it was introduced in 2007.
At least three of the demoted partners are understood to be London corporate lawyers, with the focus of the restructuring thought to be the most senior ranks of equity partners.
A small number of partners have also been de-equitised to junior partner status as part of the annual lockstep rejig, which two years ago saw 17 moved down, largely from 50 to 45. Junior partners are fixed-share members.
Ashurst’s remuneration ladder runs from 25 to 65 equity points, with rungs at 29, 33, 37, 41, 45, 50 and 57 as recently as 2010/11.
The 65-point plateau was introduced six years ago when the firm moved from a pure lockstep to a modified system under then-senior partner Geoffrey Green. A small number of partners were moved up to the elevated level at the point, but since then the group has swelled into a list of around 30 that was widely seen as being oversized.
In 2011 it significantly increased the size of the plateau from 11 to 30, although it is unclear how this has changed since then. One partner at the top of equity has left, while the resignation of Green as an equity partner from 1 May after seven years in Hong Kong as Asia head means the list now stands at roughly 22.
While no partners had yet been forced down from the 65 mark, it is understood two partners requested to be demoted in previous years but saw their offers rejected by management.
The news follows a warning issued by remuneration committee head Nigel Ward in March 2012 threatening plateau partners with demotion if they did not reach performance requirements (12 March 2012).
It is thought the demands have not changed, with the latest process seen as a response to the increased size of the plateau and the desire to keep profit levels up. Ashurst’s average profit per equity partner was £744,000 in 2011/12, a 3 per cent rise on £723,000 in 2010/11 (4 July 2012).
The development also comes ahead of the firm’s financial union with Ashurst Australia, the successor to legacy Blake Dawson, which is expected to integrate fully with the UK-based LLP this year or early 2014. The firms are aiming to align PEP by the merger, while a strong headline profitability figure is also seen as a prerequisite for a US tie-up.
Ashurst partners were informed of their new position of the lockstep in recent weeks, with the full list of equity partners’ remuneration levels set to be circulated internally in due course.