Clifford Chance‘s management is breathing a sigh of relief this week as the partnership voted in changes to its compensation structure that will see a fragmentation of its worldwide lockstep.
From the next financial year the magic circle firm will be able to operate three systems of remuneration, subject to ratification by the management committee.
A Clifford Chance source said: “It’s a departure, but it’s not eat what you kill.”
As revealed by The Lawyer (28 November), the three proposals were split into separate ballots last month.
The first vote was on ladder one, which is the reduced points allocation for economically weaker jurisdictions. The second was to formalise the partnership appraisal process, dubbed ‘MYC’, or ‘maximising your contribution’, with a yearly review. The third and most controversial vote was on ladder three – the proposal for extra profit units for particular offices. It is thought that the US operations will apply to adopt ladder three next year to reflect US economic norms.
Managing partner Peter Cornell first called for more flexibility in the lockstep at the firm’s partnership retreat in February. The results were announced internally last Friday afternoon (16 December) and all three resolutions attained the requisite two-thirds majority. The vote on the position of non-equity partners will take place early next year.