It’s been a momentous few days over at Clifford Chance. At long last it seems that the magic circle giant has resolved the prickly issue of partner compensation. Or has it?
For months and months there have been consultations, soundings, voting – you name it – all in the hope of giving the green light for the firm to pay an extra 50 points apiece for up to 12 US partners, in addition to the 100 points lawyers at the top of equity already enjoy.
This, the firm hopes, will enable it to retain and indeed attract US rainmakers in the high-stakes American market.
The Lawyer revealed on Monday that the firm had failed to secure the necessary majority to push through the proposals.
Then yesterday, there was much trumpeting from Clifford Chance over the success of its vote. But, in reality, the firm remains stuck with the current system.
Stepping outside a whirlwind of spin that would put even Alastair Campbell to shame, partners will still have to re-vote on partner compensation, probably in the next calendar year.
Put bluntly, the new partner compensation system has not been voted through.
The fact is, the firm failed to secure a two-thirds, or 66.6 per cent, majority from legacy Clifford Chance partners. True, the majority was missed by less than 1 per cent, but still it was not enough.
The good news for Clifford Chance is that well over two thirds of both legacy Rogers & Wells and Pünder partners did vote in favour of the scheme. And even with the near miss result from the Clifford Chance partners, the overall result shows that the firm’s partners endorse the premise of paying above lockstep for US partners.
So management will get what it wants – eventually – and clarity can finally be achieved. Unfortunately, yesterday’s confused and nebulous announcement from the firm has only served to stir up more unrest.
Given that the lockstep issue is now going to drag on into next year, the firm must use that time to get its story straight. With a bit of clarity, management might not find its job so hard.