Dundas & Wilson has promised nine partners guaranteed remuneration of £280,000 ahead of its proposed merger with CMS Cameron McKenna, the Lawyer understands.
In a tactical move to protect the firm’s relationships with key clients, Dundas has offered senior partners secured profit shares in line with the current top of equity, which stands at £278,000, sources said (29 November 2013).
The guarantees are understood to have been part of a high-level package agreed before the 12 December Glasgow merger vote (12 December 2013), which also guaranteed a two-year partner lock in.
Dundas co-managing partner and the only Dundas partner to join the merged firm’s board, Caryn Penley, is understood to be guaranteed the income along with former co-managing partner and soon-to-be Scottish real estate head Allan Wernham.
The £280,000 figure is in line with the highest-earner’s remuneration in 2012/13 but much higher than average profit per equity partner (PEP) which has plummeted over the past few years. It has declined from £385,000 in 2007/08 to £164,000 in 2012/13 (20 July 2012).
Penley is understood to have pushed through the £277m merger, set to go live in six weeks, with chairman Laurence Ward, who will also receive the guarantee.
The bulk of the guarantees will be handed to Scottish partners, in a move reflecting the firm’s seat of power, according to sources. Glasgow-based construction disputes partner Lindy Patterson QC is said to be one of them along with Edinburgh corporate partner Kenneth Rose, who manages the firm’s coveted RBS relationship.
“The list was bound to include a lot of the Scottish royal family,” said a source.
London corporate partner David Gibson is also understood to be on the list of those guaranteed set remuneration, as is London real estate partner Alistair Kennedy. Gibson is responsible for the firm’s Scottish banking clients in London, which are more important following the shift in banks’ seats of power following the recession.
Sources suggested that Kennedy may have been handed the pay guarantee as a move to “ring-fence” London real estate, the most important piece of Dundas’ London team with clients like Land Securities and the National Grid.
The list is believed to have been circulated around partners following the merger vote.
The rest of the firm’s partners will go into the first tier of CMS’ two-tier equity structure which runs on a 28-70 point ladder.
The £277m tie-up with CMS is due to take place in six weeks’ time but both sides are still in the process of securing panel teams with shared clients (17 February 2014).
A number of partners have left the firm following the merger announcement, including former CMS real estate disputes founder Andrew Walker, construction partner Siobhan McCloskey-Oudahar, who joined the Department of Transport, and employment partner David Walker who joined Morton Fraser’s Glasgow office on 6 January (8 January 2014).
Both firms declined to comment.