Mallesons to shake up partner pay as 'game-changing' China merger nears March launch

Profit-sharing and management details emerge ahead of ‘game-changing’ Asia-Pac tie-up 

Mallesons Stephen Jaques has launched a review of its lockstep as it emerges that the Australian leader’s Hong Kong partnership will be fully financially integrated with China’s King & Wood’s when the merger between the two firms goes live next month.

Mallesons and King & Wood partners in Hong Kong will share one profit pool from 1 March this year, with King & Wood partners understood to be transferring over to Mallesons’ remuneration system.

The Chinese firm is expected to decide where each of its partners initially sits on Mallesons’ lockstep, which is likely to become much more flexible as a result of the current review.

Mallesons currently operates a 10-year lockstep running between 30 and 100 points, with gateways at three and seven years. Possible changes could see the introduction of a bonus pool to reward strong performers. King & Wood runs a modified lockstep between five and 50 points, with partners able to move up or down depending on performance.

The Australian law firm has stated the review is not directly tied to the merger, although the changes will make integration easier in Hong Kong, 
where the combined firm will have 31 partners.

King & Wood Mallesons will operate as a three-partnership Swiss verein in China, Hong Kong and Australia, with Hong Kong the only financially integrated office.

In preparation for the tie-up a new executive committee has been appointed, with Mallesons chief executive Stuart Fuller, Australia managing partner Tony O’Malley, King & Wood managing partner Wang Ling and international managing partner Rupert Li (pictured) all selected.

Fuller said: “The battle of the brand is on. The legal world has moved beyond having just technically great lawyers to how you are positioned in the market and what your brand does to make you distinctive.

“We see this combination as a direct response to those demands and a game-changer for the legal world. We are now going to be fine tuning this combination over the coming months, maintaining our momentum and looking to increase our efficiency to make sure we stay at the top.”

The combined firm will count over 370 partners and 1,800 lawyers. King & Wood chairman Wang Junfeng will become chairman of the combined firm, while Fuller will become global managing partner and relocate from Sydney to Hong Kong.