Backlash as partners baulk at uncertainty of proposed system
Addleshaw Goddard’s management has been forced to shelve plans to radically overhaul the firm’s equity structure after a backlash from regional partners.
The firm’s partnership was due to vote on the proposed changes at a partner meeting on Friday (20 May), but managing partner Paul Devitt and senior partner Monica Burch were forced to pull the item from the agenda following opposition from elements of the partnership, understood to be mainly partners based outside London.
Under the proposed scheme the firm would have ditched its partial lockstep and replaced it with a more merit-based system.
Equity partners would have been divided into two categories, with those in each camp starting with a fixed number of points. At the end of every financial year partners would end up with differing amounts of equity points, based on performance.
At present, the firm has a lockstep in place for the first three years of partnership and thereafter points are awarded according to merit.
According to a source at the firm the new structure was seen as too uncertain by some partners, making it difficult for them to financially plan for the year.
A spokesperson for the firm would not comment on the meeting but said in a statement: “We’ve talked for some time as a partnership about our desire to continue to reinforce a meritocratic and dynamic approach to remuneration.
“That could involve a changed remuneration model, and we’ve proposed one for partners’ consideration. We did initially intend to have full discussion and decision on that on Friday, but we want to take more time to debate it, and will be consulting with partners over the next few months.”
It is understood that at the meeting partners also voted on whether the firm should amalgamate its governance board and management committee into a single entity.
The spokesperson added: “We need to make changes and improvements to take advantage of the new environment we are operating in, which is one of increased opportunity and increased busyness and yet also one of fierce competition, where there’s a need to deliver differently and better for our clients.
“We’ll be talking to partners about ways in which we can become leaner, more agile and more market-focused in our leadership, with a view to increasing partner visibility with clients and in our chosen markets.”