Linklaters is to launch a review aimed at finally handing full equity status to its German partners after last week drafting in star German recruits Ralph Wollburg and Achim Kirchfeld at the top of its core lockstep.
The review of German remuneration is being headed by managing partner-elect Simon Davies (pictured) and national senior partner Michael Lappe in a process that will look into fully integrating national partners into Linklaters’ core lockstep.
If successful, the move would shift Linklaters’ German partnership from the ‘reduced equity’ regime introduced at the time of the 2001 merger with Oppenhoff & Raedler.
The firm refuses to comment on the formula used in Germany, but lawyers familiar with the model said German equity partners start on 7.5 equity points rising to a maximum of 20, against a London range of 10 -25.
The firm had planned to phase out the model within five years but was forced to delay it after the practice failed to match firm-wide profitability. The issue is particularly sensitive for Linklaters in Germany as the practice makes up the largest chunk of its reduced-earnings partners, which averaged 145 during 2006-07.
The review, which will begin in a matter of weeks, suggests the recent decision to close its full-service Cologne office in favour of a corporate-driven practice in Duesseldorf is being used as an opportunity to galvanize the practice, which has so far failed to deliver on the firm’s ambitions.
Evidence of the renewed drive is underlined by news that Wollburg and Kirchfeld, who joined from Freshfields Bruckhaus Deringer last week to launch the Duesseldorf office, will be the first German partners to enter the London law firm’s full lockstep.
Both will receive plateau partner status, worth £1.618m annually in the current financial year, making them among the best-paid lawyers in Germany.
Davies told Legal Week: “Converging the German and UK remuneration has been a long-term goal of the firm and this is the start of that process. It was important that the new partners came in at the top of the lockstep and this reflects what we expect them to contribute.”
Just 10 of the 25 partners based at Cologne have so far confirmed that they will transfer to Duesseldorf.
Meanwhile, a sizeable number of the Cologne partners who are not joining the new office are expected to form a standalone practice under the Oppenhoff banner.
One ex-German Linklaters partner commented: “The firm has only really taken M&A and antitrust partners to Duesseldorf. It seems that they will hub their corporate practice there and the capital markets practice in Frankfurt.”
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