Ashurst partners are braced for a dramatic profits plunge of around 15 per cent, with the firm’s new managing partner Simon Bromwich having already taken steps to tighten financial management by moving underperforming partners down the lockstep.
Sources say the profits at the top of lockstep will fall from £800,000 to £700,000. Two partners have already been moved down the lockstep, and sources say there are plans to demote up to 10.
The firm modified its 10-year lockstep in late 2002 during its doomed merger negotiations with US firm Fried Frank Harris Shriver & Jacobson. It now includes two gateways through which partners can move if they clear performance-related hurdles, but they can also be moved back down should they become less productive.
Bromwich, who took over the reins earlier this year, is known to be tough on costs. His prudent approach as head of litigation is thought to have been one of the key deciding factors in his appointment to the managing partner role.
2003-04 is expected to be a poor year for most City firms, but Ashurst has had extra costs and diversions in the form of the failed Fried Frank talks, a strategic review and a global rebrand.
The total costs for Ashurst’s rebrand are understood to have come in at around £620,000, which industry sources claim is very reasonable. However, when Slaughter and May rebranded two years ago, the firm paid only around £15,000 for its new purple colour scheme.