Hammonds is set to axe the role of senior partner and turn to merit-based remuneration in the wake of its exhaustive strategic review.
The review has highlighted four key recommendations: to refocus Hammonds on the way it secures new business; a restructuring of business departments; replacing the senior partner with a non-executive chair of the partnership board; and a move towards firmwide performance-related pay.
Managing partner Peter Crossley told The Lawyer: “It’s about trying to restore the growth dynamic in the business.”
Hammonds was hit earlier this year by a slump in profitability and the restatement of figures from the 2003-2004 financial year.
Crossley said that the internal restructure was designed to strengthen Hammonds’ corporate governance, adding: “As the firm becomes more sophisticated as a business, and in order to provide more corporate governance, it would be useful to have an independent person to chair the partnership board.”
The non-executive chair will be recruited externally, and is unlikely to be a lawyer.
At the same time Hammonds will move away from its current modified lockstep system, in which partners move from 10 to 26 points with two gateways along the way, to remuneration more heavily focused on merit.
The four business departments will be real estate; corporate, strategy and finance; human capital, including pensions and employment; and commercial and dispute resolution.
A strategy director is also due to be appointed to aid Crossley in implementing the review’s recommendations. The director could be tax partner and partnership board member Bernhard Gilbey, who has led the review process.
Gilbey oversaw interviews with over 100 partners and 250 potential and current clients to draw up the recommendations. Management consultants were also hired to support the process.
Crossley will now meet all Hammonds’ partners to consult more fully on the recommendations, and the partnership will vote on the review in February 2006.