Salans partners in London are being asked to contribute 50 per cent of their previous year’s remuneration as capital when the firm merges with SNR Denton and Canada’s Fraser Milner Casgrain in the coming months.
The combined firm’s UK arm will take on SNR Denton’s capital structure, which requires lawyers to put half of their previous year’s pay into the business upfront when they join the equity either as a lateral or on being promoted.
The capital is then retained by the firm until several years after a partner leaves, understood to be a period of roughly three or four years.
Current Salans partners will have to make these contributions as they are effectively joining the successor of SNR Denton’s UK and Emea LLP.
They will, however, be able to use the amount currently in their Salans capital account to count towards their contribution.
The capital requirements are tougher than Salans’ current arrangement, which requires partners to put around 25 per cent of the previous year’s compensation into the business on joining the equity. This amount is then repaid to partners within a year of their departure, with around half being returned after six months and the remainder at the end of the first financial year.
The demands are understood to be a source of concern for some Salans partners in the UK, with certain partners also wary of the degree to which they will be integrated and welcomed on joining SNR Denton’s UK LLP.
One source indicated that a number of Salans partners questioned how long the majority of them would remain at post-merger Dentons, as the global firm will be branded.
The firms are currently working towards a 1 March live date globally for the overall firm, but the timetable for the transfer of Salans partners into Dentons’ UK LLP is still undecided (17 January 2013). Legacy Salans partners could remain in the European LLP, the offshoot of Salans, until as late as the summer, when the lease on the firm’s London premises expires.
The merger, news of which was first revealed by The Lawyer, was approved by partners at the three firms in November (28 November 2012).
Salans declined to comment. SNR Denton did not respond to requests for comment.