Mayer Brown cull is long overdue

When Mayer Brown Rowe & Maw took the unusual step of appointing what was effectively a three-man committee to run the firm on the impending retirement of current chairman Ty Fahner, I noted that to many this would smack of fudge. I also noted that, despite a legacy of ambitious expansion under Fahner’s watch, the firm’s profits lagged behind those of its main Chicago rivals (see blog).

Last week the firm signalled its determination to close the gap between it and Kirkland & Ellis and Sidley Austin by removing 45 partners from its equity, equivalent to around 10% of the partnership.

Tellingly, Sidley Austin – average profits per partner this year $1.3m (£660,000) compared to Mayer Brown’s figure of $1.1m (£560,000) – conducted a comparable exercise a full seven years ago.

Fahner is still officially at the helm. But the incoming triumvirate of Chicago-based chairman-elect James Holzhauer, London’s Paul Maher and Washington DC-based Kenneth Geller will have their fingerprints over all this. This suggests that indecisiveness will not be part of the new Office of the Chairman’s make-up.

Such drastic shake-ups typically take place on the arrival – or in this case impending arrival – of a new leadership. Think of Lovells, which announced its own round of de-equitisations shortly after the new management team of senior partner John Young and managing partner David Harris had taken shape.

Maher’s ambitions are hardly a secret. He didn’t turn down the job at Clifford Chance to see his own firm settle down into comfortable middle age as part of a relatively sleepy transatlantic outfit. Make no mistake - mass partner culls like the one happening at Mayer Brown are a tacit admission that the firm involved has taken its eye off the ball.

Recent history is littered with examples of firms that have been galvanised by such programmes. But one has to wonder why it has taken Mayer Brown so long to act. The timing may also prove awkward. There is no better time to conduct such an exercise than in a boom. The current economic jitters may help explain the sense of urgency at the firm.

john.malpas@legalweek.com