A high-level source at Linklaters has said the firm could flex lockstep in the future as a way of building up its US practice, marking a key attitude shift within the firm.
On the day of a firm-wide vote on issues including the firm’s US strategy and make-up of its international board, a senior partner revealed that the firm was gradually embracing the idea of tweaks to its sacred lockstep (24 November 2014).
The partner said: “We’re a one-firm lockstep with a single profit pool and the global profit pool means a lot to clients. But I’m not saying it’s a perfect system and there will be tweaks around the edges.
“It’s not absolutely one size fits all and there is flexibility there.”
Any break in lockstep would be provocative but the firm is not alone in reconsidering its rigid ladder as a way of competing internationally. Linklaters’ apparent shift in sentiment follows Freshfields Bruckhaus Deringers’ recent high-profile decision to flex its lockstep as part of a radical hiring spree in September (29 September 2014).
Sources said Freshfields’ decision, following six major hires, marked a final acceptance that it could not compete with US firms’ blockbuster remuneration without injecting flexibility into its model (19 September 2014).
The reputed addition of a superpointer group, adding between 10 and 30 per cent extra room to the plateau, echoed the firm’s decision to break lockstep in Asia two years ago.
Now it looks as though Linklaters could be next to bow to pressure to add breathing room to its 10-25 point ladder as it considers the future of its US strategy.
The source said: “We are pretty wedded to the lockstep and we don’t want to get rid of that but there are pressures clearly.
“This is a subject that’s debated regularly at the firm. People have different views and there’s a strong feeling that we don’t want to get rid of it, but there are steps along the way to that and we need to keep it under review.”
Despite remaining a contentious subject among the magic circle, Clifford Chance was the first to come to terms with lockstep tweaks back in 2005, when the firm introduced a three-tier lockstep. The move enabled it to cap certain offices at a 30-70 point ladder while others in more profitable offices could reach 150 equity points (19 December 2005).