Allen & Overy (A&O) has broken lockstep again for a New York finance team hired last week, about six months after it used its rejigged remuneration system to bring in a four partner leveraged finance team.
Legal Business understands the firm broke its lockstep for the hire of a three partner finance and securities team from Paul Hastings including heavy hitter Bill Schwitter.
While the firm declined to comment on which hires the lockstep was broken for or how much they would be paid, it is a clear statement of the firm’s ambition and commitment to the US market.
A spokesperson for the firm said: ‘We don’t comment on individual partners’ remuneration packages, but would point out that we are confident that our compensation system provides us with the flexibility and firepower we need in the marketplace. This group of appointments is indicative of the fact that we can compete with US firms financially.’
Schwitter will become the firm’s global co-head of high-yield and arrives alongside high-yield partner Michael Chernick and capital markets partner Jeffrey Pellegrino. The new recruits bring A&O’s New York leveraged finance partner headcount to 12.
The new team follows A&O’s lockstep-breaking hire of a four partner team in New York in July last year. The team is led by global co-head of leveraged finance Scott Zemser, who joined with Alan Rockwell and Judah Frogel from White & Case. Rajani Gupta came to A&O from Proskauer Rose, while associate Todd Koretzky joined from Milbank, Tweed, Hadley & McCloy. Koretzky was made up to partner in the move.
A&O introduced a performance-related bonus pool, separate to its lockstep, to both help retain and bring in leading talent in 2015. The firm’s overall lockstep remained unaltered running from 20 points, up two points each year, to a maximum of 50.
In terms of rewarding lateral hires with the bonus, the sponsoring partner will put a proposal to a committee which will then decide whether or not to award the lateral with extra points. This remains subject to a full partnership vote when bringing in any lateral hire.
A&O banking co-head Philip Bowden (pictured) told Legal Business earlier in the year: ‘Our challenge is that we have the leading finance practice everywhere except New York, but we are actively involved in follow-up investment. The focus for the US piece is still in New York. We are looking at potential lateral hires in restructuring, high yield and leveraged finance.’