Linklaters will have to pay up to £50m in compensation to departing partners, as new details emerge of the cost of the firm’s New World restructure.
The firm is offering an exit package of one year’s pay to partners leaving as a result of the New World programme.
It is understood that around 50 partners – nearly 10 per cent of the global partnership – will be shown the door in the coming months as the firm bids to become a smaller, more profitable outfit.
Average earnings per partner were at £1.1m in 2008, meaning the firm is facing a bill of nearly 4 per cent of its global revenue, even before partner capital is repaid.
When the reshaping plan was revealed in January, insiders told The Lawyer that Linklaters would offer partners a “generous” package to speed through
The source said: “The intention is to spend a lot of money on this. They’ll try and do this very soon and they want to do it in one shot.”
The redundancy package for associates – revealed by The Lawyer in February – is, in effect, five months’ pay plus a lump sum based on time served at the firm.
An associate with three years of post-qualification experience and also trained at the firm – spending five years in total at Linklaters – would therefore get a pay-out of around £64,000.