Following a period of upheaval that has seen Berwin Leighton Paisner (BLP) exit a number of non-performing senior lawyers, the top 20 firm is considering changes to its partnership deed to make it easier to manage partners out.
The 763-lawyer firm has kicked off a consultation with its partners over changes to the partnership deed’s retirement provisions, with a spokesperson for the firm commenting: ‘We regularly review our governance arrangements and are currently consulting partners on a number of matters including some of the processes relating to partner retirement.’
Providing further clarification, managing partner Neville Eisenberg told Legal Business: ‘We’re constantly reviewing the governance of the firm, some of which impacts on the partnership deeds. We’ve got consultations on a number of different aspects which would certainly touch on some of the processes for partner retirement. We’re in discussion with partners about that. Different proposals require different percentages [of partners to vote through changes].’
BLP, which after a turbulent period that saw its 2012/13 profit per equity partner (PEP) drop by 35% to £430,000, this year posted improved results, with a 6% growth in revenue to £246m and 35% increase in PEP to £542,000 for the 2013/14 financial year.
The firm’s drop in PEP, which followed a period of significant but costly international expansion into jurisdictions including Berlin and Frankfurt, also coincided with an 18-month period in which there have been a number of high profile partner departures.
But while the firm has undoubtedly suffered from a number of unwanted exits, it has also been undertaking a programme of managing out underperforming partners and one person familiar with the situation said: ‘There have been no more unwanted departures in the past year than in previous years.’
While it is not uncommon for firms to amend their partnership deed, particularly given the 2012 changes in legislation that saw a default retirement age become illegal, William Wastie, a partner at Addleshaw Goddard specialising in partnerships and LLPs, said: ‘It all depends on what majorities are required to amend the deed, there’s usually an amendment provision in the agreement. Such changes require careful management because of people that feel vulnerable about such change.’