The Lawyer Africa Elite 2014 features an in-depth look at 46 leading independent firms’ strategies in 15 key sub-Saharan jurisdictions, as well as the views of in-house counsel from some of Africa’s largest companies... Read more
This year, The Lawyer’s annual ranking of the largest UK law firms by turnover is available as an interactive, digital benchmarking tool. For the first time this will allow you to manipulate each data set against the metrics of your choice.
SJ Berwin is consulting with partners about the firm’s capital structure in a process that could lead to it altering its capital requirements from members.
The City firm said the review was an ongoing process of consultation with partners related to financial matters, with no decisions thought to have been taken.
However, well placed sources have suggested an increase in its capital demands is likely.
It is thought the firm’s capital requirements have stayed roughly static ever since its founding in 1982, with partners understood to input £70,000 into the business with a loan on joining the equity and an additional £15,000 for every five-point jump in the lockstep.
Partners enter the equity on 20 points and work towards a plateau of 60 points.
Those at the highest ends of the ladder are thought to pay a higher figure per point, although a cap on the total amount in individual’s capital account is said to exist.
Senior partner Stephen Kon said in a statement: “We consult with partners on a regular basis in relation to all aspects of our financials. This of course includes our capital.”
The news comes after the firm deferred January’s quarterly profit distributions in a decision described by its leadership as a frugal move.
Kon said: “We pay partners from available cash flow, which is a prudent way of managing the business. We had a big tax bill at the end of January due to our increase in profitability following our rebound from the downturn and we continue to make significant investment into the business, including opening a new office in Luxembourg, relocating our Paris office and a significant number of lateral hires.
“We like to maintain adequate cash reserves in the business. We are building these reserves and will be making further profit distributions to partners in due course.”
The firm also pushed back partners’ quarterly distributions at the height of the financial crisis, not paying payouts for more than a year from early 2009.