Lockstep revolution beckons

Clifford Chance equity partners are being asked to vote this week and next on sweeping proposals on partner underperformance, with last year’s compensation review now seen as being dead in the water.

The management is asking partners to back a scheme whereby they can be not only frozen on the lockstep, but also moved down. It is also advocating a change to the constitution as regards expelling partners. Clifford Chance currently requires an 85 per cent majority for an expulsion vote – seen by the management as an unacceptably unwieldy way of working, especially after former Bangkok managing partner Wirot Poonsuwan was ejected from the partnership last year. The proposals were trailed in a strategy paper written by managing partner Peter Cornell last summer.

The vote could dramatically change the way that the equity is shared out as the firm battles with falling profitability – profits per partner are projected to be less than £500,000 this year. The firm’s lockstep currently runs from 40-100 points; nearly half of the firm’s 441 equity partners are on plateau. As revealed in The Lawyer last July, Clifford Chance is looking at its burgeoning salaried partner layer following meetings last year between management and junior partners.

Sources within the firm have told The Lawyer that the management was cautiously optimistic at getting the vote, following a successful partnership conference last month. However, one more sceptical partner said: “It’s asking the turkeys to vote for Christmas.”