has backed away from radical plans to create an all-equity partnership model in favour of a structure designed to give junior partners a stronger voice in the running of the firm.
In a consultation paper that was sent out to all partners last week, the compensation review group is putting forward proposals designed to enhance junior partners’ status without opening up the equity.
The first proposal is to abolish voting differences between equity and non-equity partners. Junior partners will be allowed equal participation in all partner votes, including the admission of new non-equity partners, lateral hires, practice area leaders and managing partner and senior partner elections.
The second proposal will allow junior partners to be elected to the partnership board for the first time.
The third recommendation is to align junior partners’ pay with the financial performance of the firm. Clifford Chance currently operates a variety of pay structures in different jurisdictions, with different configurations of shadow units, salaries and bonuses.
Clifford Chance sources said that, despite extensive financial modelling, the all-equity structure would not have worked because of the different business models across jurisdictions. One partner said: “If we went to all-equity, some promotions just wouldn’t happen.”
The status of non-equity partners was originally part of the remit of the compensation review group, led by real estate head Cliff McAuley, but discussion was shelved last November.
The new proposals were published just as Clifford Chance was preparing for its first partnership retreat under David Childs, which took place this weekend in London. The firm has themed the retreat under the banner ‘Resurgence’.
Clifford Chance declined to comment.