CMS Cameron McKenna will reform its partnership remuneration model on 1 May, enabling salaried partners to become equity partners quicker but increasing management scrutiny on performance.
After 18 months of deliberation, the firm voted in favour of discontinuing its salaried partner level recently, achieving the required 80% majority needed to push the reforms through.
The change will see 65 salaried partners (office partners) become part of a 75-strong partner fixed-share rank.
Additionally, the time it takes to become an equity partner will be reduced by one year to enable a faster progression through the lockstep.
Under the old system, new partner spent three years as ‘office’ partners before progressing to a fixed share ‘equity gateway’ tier for sat least two more years before becoming full equity partners. The new system will see new partners having a fixed-share of the equity for at least four years before moving on to full-equity status.
According to senior partner Dick Tyler, the new structure means partners have more clarity. ‘We wanted to be sure that the partner model is comprised of not just how you share equity in the lockstep model but how you manage, measure, support and reward performance,’ he said. ‘So we were looking holistically at what we wanted to achieve strategically.’
The lockstep will continue to operate from 28 points to a 70-point ceiling, while there has been a increase in each step so partners will move up the ladder by six points a year. Partners will have their performance reviewed every three years, giving the firm the option to hold partners at a certain level of points.
The old system saw partners move up the ladder by an estimated 12.5% of their existing points, meaning the first step went from 28 to 32 and the last step went from 61 to 70.
Tyler said the changes would not significantly impact the firm’s profits, given that the number of office partners who join the equity each year are relative to the number of existing equity partners.