Clifford Chance‘s management has sparked outrage among its partners by suggesting they should all be subject to individual evaluations.
The move is seen by some partners as the first in a process that could ultimately question the firm’s lockstep system.
At a weekend strategy conference in Hammersmith, West London on 31 March, chairman Keith Clark and chief executive officer Michael Bray revealed an evaluation process with soundings being taken from senior partners and a board overseeing the results.
One partner who was at the meeting says: “The process was very bureaucratic. There were categories to evaluate people and then a big central mechanism and procedure, a bit like the way they make partners. The feeling was that there’d be lots of non-fee-earning partners going around evaluating partners they didn’t know.”
Clifford Chance’s pure lockstep structure is already under threat following the firm’s mergers with Grimaldi e Associati and Rogers & Wells.
In both cases, senior partners were brought in outside the seniority-based pay structure, with Grimaldi’s name partner Vittorio Grimaldi earning between £2.5m and £3m, three times the top of lockstep (The Lawyer, 16 October 2000).
A source close to the firm says that Clifford Chance has long been considering some kind of modification to its lockstep, with pauses in the progression up the ranks being mooted as one possibility.
Deputy chief operating officer Chris Perrin says: “[Partnership evaluation] was a proposal discussed for future strategy. We’re now developing the ideas in the light of points made by partners at the meeting. When these are formalised, they’ll be communicated to the partners.” He denies the move is to do with modifying the lockstep, stating that it is aimed at partner development.
Other topics under consideration include the firm’s client base and a renewed commitment to corporate finance.
Another partner at the meeting says: “It was about getting more work out of the bigger clients, and global clients versus individual office clients. There’s a number of people we should be dealing with and a number that we shouldn’t.”
One partner says that the proposal to focus on corporate finance work was not unanimously welcomed. He says: “Telling Clifford Chance that they should focus on M&A and equity capital markets, considering it’s a traditional finance firm and a lot of offices have their own clients, is not easy.”
At the end of the meeting, the two candidates for the post of deputy chief executive officer, joint European managing partner Peter Cornell and London managing partner Peter Charlton, made their first speeches to the entire firm.
One partner describes the difference between them as being that Charlton supported the management and Cornell picked up on the anti-management feelings at the meeting. The battle lines are drawn.