King & Wood Mallesons has wrapped up a review of its 170-strong partnership across Europe and the Middle East with plans to remove underperforming partners.
KWM has been carrying out an active management of its partnership to boost the profitability of the network it gained from merging with City firm SJ Berwin at the end of 2013.
The Hong Kong-headquartered firm has carried out an extensive review of legacy SJ Berwin operations, with a number of partners having been asked to leave. As a result, up to 10% of the partnership in Europe and the Middle East could be managed out. The move follows a wide-ranging cost-cutting exercise across the region, with the firm subletting space in its London, Paris and Frankfurt offices and relocating to cheaper premises in Milan. The firm reports that it has saved £6m from these measures.
The planned managing out of partners across the region follows a raft of unwanted exits in the City in the last year, with the firm’s renowned private equity group decimated by ambitious US firms offering stronger links to US-based clients and bigger salaries. Frmer corporate co-head Richard Lever left the firm for Goodwin Procter in April to launch its City private equity practice, Paul Hastings hired corporate partner Duncan Woollard in May, while private equity heavyweight Steven Davis joined Proskauer Rose last December.
According to the firm, average profit per equity partner (PEP) for KWM’s Europe and the Middle East arm rose by 39% to £610,000 during the last calendar year as revenues for the region grew 7% to £191m.
KWM senior partner Stephen Kon said: ‘We look at our partnership and performance on a regular basis in order to manage our business in a sensible and prudent way.’