When you think of Lovells, do you still think of a cuddly, caring, sharing firm? Well, I’ve got news for you: Lovells is more ruthless than Linklaters in its own quiet way. The Lawyer can reveal this week that Lovells has embarked on a partner cull in Germany and plans to do the same thing in London before April.
There’s nothing wrong with this, as Linklaters’ management knows. After all, why should underperforming partners hide behind lockstep while others are working their butts off and talented associates are denied partnership?
When you think of Lovells characters – impeccably chic blonde managing partner Lesley MacDonagh, eccentric Basil Fawlty-esque senior partner John Young and even jolly guitar-playing head of property Bob Kidby – you don’t think of tough, money-driven managers. Somewhere along the line, though, Lovells’ management has found inner steel. In 2002, the firm reintroduced the concept of salaried partnership. The constitutional change gave Lovells a way to deal with partners who just aren’t bringing in the revenue you would expect, without having to get rid of them completely.
Since then the firm de-equitised an initial round of Lon-don partners in late 2002 and is now carrying out a strategic review of the Hamburg, Frankfurt and Düsseldorf offices (Munich is pretty good already). The idea is that, by going for the same sort of work they actually end up competing with each other, a problem even the best German law firms such as Freshfields Bruckhaus Deringer can attest to. To combat this, each office will specialise in its strongest areas.
The problem is that there are a lot of generalist commercial lawyers left in Lovells’ German practice, and it still has valued smaller Mittelstand clients who want generalist commercial lawyers but who won’t pay global rates for them. You can’t have lawyers like that going to the top of the lockstep, because they are simply not bringing enough money in. If you de-equitise, they may not even have to take a pay cut, but they won’t ever expect to scale up to the top of the lockstep.
Some partners are disgruntled, but management hopes the best will see the light. Lovells managing partner for Germany Oliver Felsenstein is leading the way on commerciality, quitting his time-consuming management role to run the corporate group and his star private equity practice.
And London is next for Lovells. So, move over David Cheyne – lawyers in Linklaters’ corporate department may live or die by your word, but Lovells’ management has an iron fist to rival yours.