The process – the brainchild of Cobbetts managing partner Michael Shaw – is set to reach completion before the end of the financial year in April.
Current salary and fixed-share partners will take on a new role of assured equity partner (AEP) – the equivalent of a fixed-share partner with 10% of their remuneration dependent on the firm hitting budget. If Cobbetts exceeds budget, AEPs will be eligible for a further share of firmwide profits.
Existing equity partners are reclassified as variable equity partners (VEPs), with earnings determined by a remuneration committee.
Eight partners are considering whether to leave the firm rather than become AEPs; they have until the end of the financial year to decide. Seventeen partners that are due to retire over the next five years will be unaffected by the changes.
Meanwhile, a new role of legal director has been introduced for lawyers with between seven and 10 years’ post-qualification experience.
Shaw told Legal Week: “The process started 18 months ago in a bid to have a more transparent and logical partnership structure that would drive forward the firm’s performance while reinforcing a collegiate nature.”
The move comes after an overhaul in 2006 saw Cobbetts cut its partnership by 15% in a bid to increase profitability.
In a separate move, the firm is set to slash its partnership board from 11 partners to just six, with the managing partner no longer taking a place on the committee.
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