As merger talks between Greenberg Traurig (GT) and Berwin Leighton Paisner (BLP) continue at pace, GT executive chairman Richard Rosenbaum has outlined the key obstacles to any merger with BLP: any change to its ‘black box’ closed remuneration arrangements and any verein-style compromise over financial integration.
GT’s ‘black box’ compensation framework remunerates partners on a merit basis rather than seniority and is akin to a corporate system in which individuals do not know what others are paid. The only other major global firm to operate such a system is Jones Day.
However, Rosenbaum indicated that there was room for manoeuvre over the short term.
He told The Lawyer: “It may well be that you do all kinds of things to transition into a merger, but long term, for our firm, transitioning out of a closed comp, merit-based system would be a non-starter.”
Rosenbaum categorically ruled out any verein arrangement. “We believe in having one firm, one unified firm and one profit pool,” he said.
Last year GT’s average profit per equity partner was reported at $1.475m (£1.05m), while top partners are thought to be on at least £3m (£2.14m). BLP’s partner pay system is a loose lockstep and has increasingly introduced more merit elements. Last year average profit per equity partner was £659,000 with top partner on £1.5m.
In the clearest indication yet that the BLP-Greenberg Traurig talks are progressing at speed, Rosenbaum and BLP managing partner Lisa Mayhew met in Hong Kong last week.