Freshfields Bruckhaus Deringer has launched a full-scale review of its cherished all-equity partnership model, including the possibility of de-equitising partners.
In what is a momentous U-turn, the magic circle firm’s senior management has confirmed that it is considering a wide range of changes to its partnership model, including the creation of fixed-share partners across the firm.
The review follows the firm’s momentous move in February to ditch its all-equity partnership model in the Far East and introduce salaried partners in Beijing, Hong Kong and Shanghai.
Co-senior partner Konstantin Mettenheimer confirmed to The Lawyer that he had been in talks with fellow co-senior partner Guy Morton regarding a number of different options, including whether possible changes would affect existing partners, groups or individuals.
“We’re thinking in all directions,” he said. “We feel there’s a need for flexibility and there are a number of other firms which have done this, such as Slaughter and May and Herbert Smith, which we can take into account.”
Sources said a proposal was likely to be put to the partnership in the coming months.
Freshfields move is the latest in a turbulent year. The firm is actively seeking a US merger. Raising average partner profits to match those on Wall Street would be a key component of that strategy.
It is understood that there is a management meeting this week, where the changes will be discussed and where it will be decided when to take it to the partnership.
Sources suggested that this would be a firmwide policy, not determined on a country-by-country basis.
Mettenheimer said: “We’re listening to what our clients say. We have to look at how we structure our remuneration so that it’s in line with our clients’ needs.”