Clifford Chance to cap payouts to ex-partners

Clifford Chance is considering cutting annuities for former partners in an attempt to save a further £12m as part of its cost-cutting programme

Clifford Chance to cap payouts to ex-partners” />Chief operating officer David Childs kickstarted the annuities debate at the partnership retreat in Paris on 3-6 March. Currently, retiring partners are entitled to 20-35 points for five years, depending on retirement age and length of service.

Clifford Chance is one of the few firms that still bestows annuities on former partners. Freshfields Bruckhaus Deringer grants former partners annuities for life.

One partner said: “It would have to be transitioned for the next generation of partners. We’d have to have some run-off. It’s not a big amount, but it’s growing, so we’ll have to have some cap on it.”

Meanwhile, the US practice has been set tough financial targets after disappointing third-quarter figures.

The US practice is currently generating £6,000 profit per unit compared with a projected average of £7,100 per unit across the firm.

Clifford Chance’s management has called for the US to hike its utilisation rate, which is 85 per cent in New York, compared with 95 per cent in London. It is understood that managing partner Peter Cornell has called for utilisation to hit 95 per cent across the firm.

Clifford Chance declined to comment.