City firms restructure rewards as practices move from traditional lending
Linklaters has undertaken a review of equity points in its finance practice, as banking groups continue to move toward sponsors and away from traditional lenders.
The firm’s London banking team had grown significantly in size through the 2000s, but as the market tightened post-2008 it has become more competitive. According to several City partners, the practice is in need of rebalancing away from senior equity partners with practices focused on traditional lenders.
One former partner added the firm had been aiming to trim between 160 and 180 points from its banking team around nine months ago under the old system, where the top of equity sat at 25 points, the equivalent of around seven partners at the top of the lockstep.
Legal Business understands there were some managed changes to point distribution. Around six exits, about half of which are retirements, are expected from the practice in coming months, while four new banking partners were elected in the firm’s last promotions round. The firm has close to 100 banking partners globally, with around 40 in London.
However, a Linklaters spokesperson said: ‘There are no plans to actively reduce headcount over the next 12 months in our banking or finance practices.’
Another former Linklaters partner said: ‘The team needed a degree of reinvigoration and focus in the more mainstream practice areas that are probably a bit over-partnered. I don’t see how people can justify some of the pay at the top of the lockstep at Linklaters in mainstream banking.’
Linklaters global head of banking Tony Bugg has led the refocusing of the firm’s finance offering since his appointment last year. Last February, Bugg brought in four specialist team heads in a bid to ‘bring in more accountability’.
Linklaters is not the only Magic Circle firm taking a look at its finance team. Freshfields Bruckhaus Deringer recently saw the resignation of its sole London-based aviation finance partner, Rob Murphy, as part of a wider review, while two more City finance partners are set to retire this month. Freshfields has been clear it wants to focus more on sponsor clients and has moved some finance partners onto a second-tier of lockstep.
matthew.field@legalease.co.uk