Linklaters threatened with global dissolution

Sacked German partners fight back citing breach of partnership agreement

Linklaters threatened with global dissolution” />Linklaters is a facing a legal action to dissolve its entire global partnership.

The threat comes from a group of German partners who informed the firm last October that they were considering dissolving the partnership in the UK courts.

The firm forcibly removed four partners in October when a partnership vote ratified an earlier decision by the international board that they must leave the firm as part of a broader cull in Germany.

However, The Lawyer understands that the partners concerned have told management that they were removed in breach of the partnership agreement. Negotiations as to the terms of the partners’ exits are ongoing and the group has not yet withdrawn its threat.

Linklaters managing partner Tony Angel said: “No former or current partners are bringing an action for dissolution.” There is no suggestion that such an action has actually been filed. Angel added that he did not expect such an action. He declined to comment on why the firm instructed counsel to advise on the matter.

The German partners instructed West London firm Pinkerfield Solicitors last year after the international board recommended that they be de-equitised.

Linklaters sources say the partners claim the firm should have given a formal warning and a chance to improve their profitability under Linklaters’ ‘two strikes and you’re out’ policy for de-equitisation.
Pinkerfield obtained counsel’s opinion that said the partners could dissolve the partnership under UK law.

Linklaters’ management instructed Lord Grabiner QC and Laurence Rabinowitz QC of One Essex Court for a counter-opinion. They said the dispute would have to go to arbitration and that the arbitrator could not order a partnership dissolution.

That the de-equitisations had to go to a full partnership vote is itself extraordinary, as until now partners have left the firm quietly if asked to do so by the international board.

Some sources at the firm said the partners had considerable support, both in their own country and in London.

Angel claimed the firm had overwhelming support for its German “restructuring”. However, some partners did contact senior partner An-thony Cann to query whether the four partners in question were being treated fairly.