Clifford Chance partners have voted through changes to the firm’s lockstep that will see it move away from the single profit pool system.
The proposed changes were voted on last week and could result in a more flexible system for top partners in a bid to retain star lawyers.
The Lawyer revealed Clifford Chance had kicked off a review of its lockstep in January (26 January 2015). Market sources suggested that the inclusion of superpoints for star performers and a more flexible approach to points allocation were first mooted in a bid to retain and attract talent more easily.
The changes could see leading partners moved from 100 points up to 115 or 130 points. Other partners could see a reduction in the number of points from 100 to 70. A superpoints profit pool totalling £2.3m may also be introduced for plateau partners. The points allocated for new partners are expected to remain the same.
Clifford Chance currently operates a lockstep system that sees partners spend three years as juniors before progressing to become equity partners.
An insider said a review of the system was proposed by managing partner Matthew Layton who was elected in November 2013 (28 November 2013).
In January, a source said: “It will probably involve a more flexible approach in terms of encouraging some of the younger lawyers to stay by making it quicker for them to progress and some of the older partners will be retained because superpoints will be added.”
Clifford Chance currently has a three-tier lockstep. Despite operating a global profit pool, a greater number of points are available in more profitable offices. The system was voted in after a consultation in 2005 (19 December 2005).
The first ladder has a reduced points allocation for economically weaker jurisdictions, believed to be between 30 and 70 points.
The second ladder was designed to formalise the partnership appraisal process. It was dubbed ‘MYC’, or ‘maximising your contribution’, with a yearly review, and is understood to run between 40 and 100 points.
Ladder three is understood to have been brought in to reflect US economic norms, and is believed to run between 110 and 150 points.
It is uncertain whether the vote will result in a change to the three-tier system or whether it will create a unified global lockstep. However sources have suggested that changes are to be instigated in Germany first ahead of a firm-wide roll out. It remains unclear what criteria will be used to decide how partners will move up or down the ladder.
Clifford Chance declined to comment.