Top Swiss firm in five-partner expulsion row

One of Switzerland’s largest firms, Pestalozzi Lachenal Patry, is locked in a dispute with a member of the group of five partners expelled last year over strategic and management differences.

Tax partner Marcus Desax, now at Swiss rival Walder Wyss & Partners, initiated conciliation proceedings before the Zurich Bar Association on 9 January, claiming the return of his capital deposit and damages.

Desax refused to comment on the precise detail of his claim but admitted it concerned “financial issues” relating to the individual remuneration of partners and the control of the firm.

The row is believed to have centred on a clutch of measures the group of five sought to introduce during the course of last year. The partnership voted twice on the measures, in the spring and summer, before a majority of the partnership resolved to expel the group.

“The five of us had proposed measures that would ensure Pestalozzi remained in the top tier of Swiss law firms,” said Desax. “These measures would have affected some of the partners. Jürg Borer terminated his partnership in August and the partnership terminated us [the remaining four partners] on 13 November.”

Thirty-partner Pestalozzi is an all-equity partnership with no merit element included in partners’ remuneration. It is understood that the group’s plans included an overhaul of Pestalozzi’s remuneration system, including the introduction of performance-related criteria into compensation.

Pestalozzi managing partner Robert Furter confirmed that one partner (antitrust specialist Borer), resigned in August and left in November for Schellenberg Wittmer.

“Four more partners were then expelled from the partnership over strategic differences last November,” added Furter.

Three of the partners (Desax and litigators Peter Straub and Marc Veit) joined Walder Wyss in December. The fifth, IP litigator Robert Briner, joined CMS von Erlach Henrici.

Furter confirmed that his firm was “in negotiations over the financial terms of the departure”.