The dispute - news of which comes as London office head David Dalgarno (pictured right) announces his decision to stand down - centres on the capital payment made by partners when they join the partnership, which is meant to be repaid within a guaranteed period when they leave the firm.
McDermott confirmed the current dispute and acknowledged late payment to another partner. However, the firm denied claims by other former partners that they had also experienced delays receiving money owed to them.
The firm’s partnership agreement means it is obliged to pay back capital within 90 days of a partner leaving the firm.
In a further complication, two former partners received too much money after they left, with McDermott continuing to pay them from the profit share after the payments should have stopped.
The firm’s City office has suffered a flood of departures over the last two years, with more than a dozen partners quitting the firm. These have included former corporate head William Charnley, who moved to Mayer Brown, employment head Fraser Younson, who joined Berwin Leighton Paisner, and intellectual property head Larry Cohen, who joined Latham & Watkins.
In addition, White & Case hired the US firm’s former managing partner John Reynolds as well as capital markets duo Andrew Croxford and Andrew Caunt.
Other partners to have left include financial services partner William Yonge, who moved to Proskauer Rose, and pensions partner Danny Tsang, who joined Kirkpatrick & Lockhart Preston Gates Ellis.
A firm spokesperson said: “[In terms of] overpayments of profits, two departed partners were overpaid due to clerical errors - one by two weeks and one by six months. There is no dispute with these partners and the sums have been repaid in full. The firm has repaid capital to all its ex-partners, except one where there is a dispute.”
As Legal Week went to press, McDermott was set to confirm a new local managing partner for London. Dalgarno, an employment specialist who has held the post for four years, is expected to remain with the firm as a partner with his replacement taking over in April. The move is unrelated to issues with former partners.
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