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Mayer Brown London office avoids brunt of 45-partner de-equitisation

Author: georgina.stanley@legalweek.com, james.illman@legalweek.com

Published: 08/03/2007 04:50

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Mayer Brown Rowe & Maw’s London arm looks set to come away largely unscathed from the firm’s restructuring, in which 45 partners will be axed from its equity — equivalent to around 10% of its equity partnership.

The firm, which announced the cuts last week as part of a drive to boost profits, will remove 42 US partners from its equity partnership, with only three further cuts coming elsewhere. This means the 104-partner London office is unlikely to see many departures.

The affected partners have already been notified and around half are expected to leave the firm altogether.

London senior partner Paul Maher said the vast majority of the cuts have been made in the US because the firm’s American operation accounts for about 75% of the firm’s total revenues

He commented: “Downsizing the partnership to this degree is all about us being in a better and healthier position… We are still looking at a number of things to take the firm to the next level in terms of profitability and position in the marketplace.”.

A robust performance from Mayer Brown’s UK arm in 2006 will have further boosted its standing.

Likewise, a significant chunk of the partners set to be cut are in the firm’s litigation group, which accounts for about 40% of firm-wide revenues.

Mayer Brown has experienced a number of partner departures from its New York office despite unveiling robust year-end figures for 2006, in which turnover rose 11% to just under $1.1bn (£560m).

The decision to cut such a large group of partners follows a similar restructuring by Mayer Brown’s national rival Sidley Austin in 2000, when it de-equitised 31 partners.

Ex-partners attributed the move as an attempt by the firm to keep up with Chicago-based rivals such as Kirkland & Ellis.

One ex-Mayer Brown partner commented: “It has always had a battle with Kirkland and, whatever you think of Kirkland, it is a pretty good operator and very profitable. This could be part of the strategy.”

He added: “De-equitisations will be easier to do at Mayer Brown than at other firms as the management board has the power to remove partners.”

The move follows Mayer Brown announcing a rejig of its top brass in October last year, with the firm appointing three partners to replace outgoing chairman Ty Fahner, when he steps down next spring. General counsel James Holzhauer will take over as chairman, with Maher and Washington DC chief Kenneth Geller becoming vice chairs.

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