Clifford Chance’s management is set to publish this week its long-awaited partner compensation review, which will reaffirm its commitment to lockstep – despite pressure from some US partners to retain or expand a superpoints system
The review’s conclusions signal a victory for London partners, who have traditionally taken a strong pro-lockstep line, although they are subject to a partnership vote this September. The timing of the review is crucial, coming just before the firm embarks on a push to deal with under-performers and as it stretches the salaried partner ‘waiting room’ from two to three years.
The compensation review, which was originally to have been published more than two months ago, comes at a time of falling profits and revenues for the firm. Turnover has fallen to £979m from £1bn in the previous year, with average profits per partner dropping from £714,000 to some £643,000.
Sources have said that any reaffirmation of lockstep will go hand-in-hand with a tough line on partner profitability and performance in the coming financial year. The firm is currently rolling out a full partner appraisal system.
The review, which has been led by global corporate head David Childs, is also considering a bonus pool that will allow a number of partners to be awarded extra chunks of profit in any one year. The Clifford Chance lockstep currently runs from 40 to 100 points, with top partners this year on some £720,000.
Although a bonus pool has not been designed as a sop to the US, this compromise may go some way to placating a number of New York partners, who are understood to have been agitating for extra units after the departure of antitrust rainmaker Kevin Arquit to Simpson Thacher & Bartlett.