‘Lockstep in its current form has to go. It’s just not working.’
Legal Business, June 2015
‘The current incarnation of lockstep is an overly restrictive model that was a child of its time…. The failure to substantively adapt the model… has increasingly threatened to shatter a system that still delivers considerable benefits.’
Legal Business, October 2013
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Forgive me, readers, because I am not going to be saying anything over the next 450 words that I have not already said before but I am this time going to say it louder, because the message has not gotten through.
With news last month that Freshfields Bruckhaus Deringer has voted through wholesale reform of the lockstep partnership model the firm has raised to the level of religion, you could argue that top London law firms are at last realising the needs of a fundamentally-changed industry.
That is doubtful. Freshfields – a firm that did not introduce lockstep until the 1970s – managing the preceding 230 years fine without it – clung on far too long before adopting a package it should have introduced two years ago.
Linklaters, Clifford Chance (CC) and Allen & Overy, meanwhile, have ushered in more modest shake-ups – most credibly and coherently last year in the case of Linklaters. A very charitable view of CC’s record on this issue over the last 17 years would be that it was just plain bad.
It has been blindingly obvious for years now that the peculiarly compressed and restrictive model of lockstep forged over three decades ago was now out of step with the shifts in the global legal industry since the banking crisis. Yet London law firms that once ran rings around global rivals in tactical agility and daring have repeatedly put off the inevitable. That stance has sent a clear and damaging signal to many of their best partners about their aspirations and the extent to which their agendas were defined on the basis of seniority rather than contribution.
Lockstep’s supporters will argue that it brings huge benefits in aligning teams, delivering the institution to clients and making firms take quality control in the partnership seriously. These considerable virtues are all worth retaining but the notion of preserving an exact model forged for a completely different era had become untenable.
Even now having gotten through new regimes at Linklaters and Freshfields that on paper should do the job – particularly if Freshfields makes good on its expectations of pushing profit-per-point well over £50,000 – questions will remain over whether London’s elite can use the tools they have introduced. If Freshfields tries to save face by routinely holding partners to a 14-year track, what it has just voted through will not only be insufficient, it will prove actively counter-productive.
Two years ago, London’s top firms – having been through a sustained period of restructuring and reshaping – looked primed for dramatic revival. It did not happen. If they are not to squander their assets and achievements they cannot afford such complacency.
For the full story on Freshfields, please see: A dramatic break with lockstep for Freshfields but will it be enough to galvanise the City giant?