While Herbert Smith Freehills became embroiled in a very public court battle over a team defection to White & Case in Australia earlier this year, Simmons & Simmons has quietly amended its partnership deed following a group exit to Allen & Overy (A&O) in 2016.
In the space of four months from last summer, Simmons lost four intellectual property (IP) partners to A&O, including highly-regarded patent specialist Marjan Noor in June, followed by London IP head Marc Döring in August, and Mark Heaney and David Stone in September.
The firm reacted by trying to rush through three amendments to its partnership deed. While Simmons refused to discuss the intricacies of the provisions, it confirmed that the partnership rejected the move during a consultation process.
Following further consultation, Simmons’ management brought a narrower proposal relating to team moves back in front of the partnership conference in Lisbon last October. This time, it was voted through.
Under the new provisions, partners are prohibited from taking a team with them for a set period after leaving the firm. However, the amendments also include a provision allowing the senior partner to negotiate a payment from the new firm in exchange for any team moves.
Simmons senior partner Colin Passmore said: ‘Yes we have had a review, including a debate with partners around our covenants and what happens when partners leave, in terms of their obligations. Making sure covenants are fit for purpose in a modern world where teams are sought after is important and it makes business common sense.’
One former Simmons partner commented: ‘Passmore is not in the business of forcing people to stay. But the firm has lost all that revenue from the A&O leavers in one of its most profitable practice areas. However, I think these sort of changes are negative and it’s wrong to spend more time on its own deed than on improving profitability and convincing good people to stay.’
In contrast, one leader at a rival top 10 City practice backed the move observing: ‘The underlying philosophy is that people make promises when they become partners and they should keep them. Partners, unlike employees, have a duty to protect the goodwill and confidential information of the firm.’
georgiana.tudor@legalease.co.uk