DLA Piper has unveiled its plans to move to an all-equity partnership model in the non-US side of its business.
DLA Piper International currently has a mix of full equity, senior fixed-share equity members and fixed-share equity members, with approximately a third of all partners in each grouping.
The firm is now set to launch a consultation process aimed at moving all partners onto a single class, a transition that will require fixed-share partners to inject new capital into DLA Piper.
UK regional managing partner David Bradley would not say how much capital partners would be expected to pay but denied the move was a revenue raising exercise.
“The firm is very well funded,” said Bradley. “If we’d done this while our profitability was going down some of our partners would have understandably questioned our motives. But we’re planning for enhanced profitability this year. This move is about looking to align the interests of all the partners in the firm.”
Bradley added that there would be “safeguards” for partners’ remuneration at the lower levels.
“There will be some guarantee for partners up to certain thresholds,” Bradley said. “We’re not just going to have a free-floating system for every partner.”
As part of the planned changes DLA Piper will also even out voting rights among all partners.
“If this goes through every partner will have a vote on every issue on which there is a vote,” added Bradley. “Currently there is a complex system under the partnership agrement where some partners vote on some matters but not everything.”
The consultation is expected to complete by the end of this calendar year with a vote on the proposals expected in early 2012.
The changes, which will also require a revised members agreement, are expected to take effect from 1 May 2012.