German partners finally achieve parity with London as Oppenhoff posts better than expected figures
Linklaters has thrashed out a new remuneration package with Linklaters Oppenhoff & Rädler, bringing forward the entry of the German partners into the UK lockstep. The new deal was struck in the run-up to last week's partnership retreat. It replaces the old arrangement, whereby the country factor capping German partner salaries was to be reviewed two to three years after the firms' merger last January. There will now be a much quicker convergence between Germany and the UK to reflect Oppenhoffs' enhanced profitability. German managing partner Markus Hartung said: "We'll reach the full Linklaters lockstep in a very short period of time. No one will be left behind." Hartung said the current system was set up to avoid disappointment in the UK over German profitability, and to avoid placing too much pressure on German partners. "But then the German practice developed much more quickly than expected," he said. "The time it was taking to bring profitability closer together was much shorter than we thought. If those things change it's only fair to review the system." Linklaters senior partner Anthony Cann admitted: "No one particularly liked it [the old deal], but they were prepared to go with it." Crucially, the new package will also abolish the so-called individual factor linking partner salaries to individual revenue, which is heavily determined by practice area. By contrast, subsequent deals for Sweden and Belgium involved only a country factor capping the value of each point in London's lockstep system. Linklaters officially maintains that an individual factor has never existed for Germany. However, a senior German partner told The Lawyer: "We had a country factor and we had individual factors, because there are practices in which one can achieve the Linklaters level of profit and there are practices which need a longer period of time." Under this system, the plateau figure at the time of the merger ranged from around £390,000 for a labour law partner up to £600,000 for an M&A rainmaker. The source said: "We've found a solution which moves very quickly away from those individual practice factors. We've had some very open discussions with clients about pricing. They appreciate that if they get very high-quality advice from a law firm, there is no reason to pay a lower price. There is no further need to keep an individual factor for a partner." The plan for Sweden and Belgium could also see the country factor adjusted to give partners a greater share.