Salans partners to double capital contributions when Dentons merger goes live
Salans partners in London are being asked to contribute 50 per cent of their previous year’s remuneration as capital when the firm merges with SNR Denton and Canada’s Fraser Milner Casgrain in the coming months.
The combined firm’s UK arm will take on SNR Denton’s capital structure, which requires lawyers to put half of their previous year’s pay into the business upfront when they join the equity either as a lateral or on being promoted.
The capital is then retained by the firm until several years after a partner leaves, understood to be a period of roughly three or four years.
Current Salans partners will have to make these contributions as they are effectively joining the successor of SNR Denton’s UK and Emea LLP.
They will, however, be able to use the amount currently in their Salans capital account to count towards their contribution.
The capital requirements are tougher than Salans’ current arrangement, which requires partners to put around 25 per cent of the previous year’s compensation into the business on joining the equity. This amount is then repaid to partners within a year of their departure, with around half being returned after six months and the remainder at the end of the first financial year.
The demands are understood to be a source of concern for some Salans partners in the UK, with certain partners also wary of the degree to which they will be integrated and welcomed on joining SNR Denton’s UK LLP.
One source indicated that a number of Salans partners questioned how long the majority of them would remain at post-merger Dentons, as the global firm will be branded.
The firms are currently working towards a 1 March live date globally for the overall firm, but the timetable for the transfer of Salans partners into Dentons’ UK LLP is still undecided (17 January 2013). Legacy Salans partners could remain in the European LLP, the offshoot of Salans, until as late as the summer, when the lease on the firm’s London premises expires.
The merger, news of which was first revealed by The Lawyer, was approved by partners at the three firms in November (28 November 2012).
Salans declined to comment. SNR Denton did not respond to requests for comment.
Readers' comments (1)
The leadership teams of Salans, SNR Denton and FMC | 22-Jan-2013 9:59 am
We would like to correct some factual inaccuracies that appeared today in an article in The Lawyer regarding the combination of Salans, FMC and SNR Denton.
The partners have agreed to harmonize our capital requirements over time, but it has not been decided whether capital requirements will go up or down by any specific amount, nor have any other details been addressed on this topic. In short, the statement that all partners must move to the SNR Denton capital structure is incorrect, and therefore, no partner who has chosen to leave could cite changes in capital as a reason for leaving.
Our firms are currently focused on working toward an integrated effective date to launch the new Dentons later this quarter, not March 1st as was inaccurately reported. While we work toward an effective date many Partners are already actively engaged in creating business solutions for our clients across geographic regions and areas of expertise.
The partners at Salans, FMC and SNR Denton voted overwhelmingly in favour of the combination proposal to form our new firm, Dentons, understanding well the terms of the proposal. No combination partner is changing their capital requirements because of the combination this year. The story that ran today in The Lawyer is factually inaccurate. And no partner who is leaving has cited the current unchanged capital requirement as a reason for leaving because the issue does not exist.
Unsuitable or offensive? Report this comment