partners from the legacy UK firm have revolted against the new compensation scheme, refusing to back proposals to revamp the lockstep.
The crushing conclusion of the compensation review, announced internally last week, revealed that only 70 per cent of legacy partners voted in favour of the new system, which is 5 per cent short of the majority needed to implement the scheme.
It will now be up to the partnership council, chaired by senior partner Stuart Popham, to decide whether to ask partners to vote again or to find an alternative method to secure support for the compensation system.
The result is a huge blow to the firm’s management, specifically its partner compensation review group, headed by David Childs, who is global head of corporate and the newly-appointed chief operating officer.
After months of in-depth consultation, the review group published a report on 3 July recommending lockstep with an additional bonus pool for the US. This was then followed by a two-month voting period, which began in September.
It is understood that more than 75 per cent of both legacy Rogers & Wells and Pünder partners voted in favour, meaning that overall the firm had theoretically secured the majority needed for the lockstep/bonus pool method of compensation.
However, Clifford Chance’s management is stuck in limbo until the partnership council finds a solution to loosen the deadlock with legacy Clifford Chance partners.
If the proposals, which would see high-billing US plateau partners receive an additional 50 points on top of the 100 units lawyers receive at the top of lockstep, fail to gain backing, it may prove catastrophic to retaining or attracting US rainmakers.
In its last financial year, Clifford Chance plateau partners earned £734,000, or $1.2m, with some US partners compensated above the top of lockstep.
Last week The Lawyer revealed that the firm had planned to cut back highly-rated antitrust partner Steve Newborn’s 200 points to 150.
Clifford Chance was unavailable for comment.