Welcome back to the Fides Weekly Update. Scroll down to take a look at what news stories our researchers have been talking about and don’t forget to check out this week’s movers and shakers!
1) ABS takes on a new form
As we witness an influx of Alternative Business Structures (ABS) appearing amongst traditional law firms in the market, the SRA has granted an ABS license to an all the more unusual business model, in which fee earners and employees alike could earn the same amount of remuneration.
South west law firm Stephens Scown has become Stephens Scown Limited after employing a shared ownership model, making it the largest law firm to introduce such a scheme. The business model, most commonly used by department store John Lewis, will come into play at the start of May and will work by depositing all profits exceeding the minimum threshold into a pool. This will then be split 50/50, half being distributed between staff members and the other half retained by the firm.
Average bonuses will rise considerably under this model, with an average bonus of £1,300 for staff last year expected to increase to over £2,000 this year. The levelling out of remuneration across all ranks is a risky strategy for the firm and unchartered territory within private practice. However, there is no doubt this model will encourage all members of staff to perform well and take responsibility for the firm’s profitability as they will be direct beneficiaries. Robert Camp, managing partner at Stephens Scown, said: “I believe it will have a tremendously positive impact on the firm. Back-office support staff in particular will feel much more involved as we will all be working towards the same goal.”
It was revealed last month that Mischon de Reya may also be considering undertaking a shared ownership scheme. The firm’s proactive attitude to market-leading initiatives, such as agile working and “unlimited holidays”, shows their sincerity in implementing such a daring scheme, as well as the value they place on their employees in fostering a healthy firm culture.
The SRA’s decision to grant such a license is another ground-breaking movement in the sector and points to further diversification of the legal market. This adds another layer of competition for traditional law firms, who due to their fixed pricing structure and less flexible working models need to continue to pursue more competitive strategies to remain attractive to their workforce.
2) Firm’s strategy focuses on diversity
In celebrating the principles of International Women’s Day that took place on the 8th March, Osborne Clarke announced this week that they have hired their first diversity and wellbeing manager Su Akgun.
The appointment comes as Osborne Clarke update their firm-wide strategy to include a strong focus on diversity, with Akgun’s role specifically covering family balance, female retention and social mobility. Currently 20% of the firm’s UK partnership are women, compared to 62% in non-partner legal roles. This sits on average with female partnership rates across the UK top 25 firms at 20.61 percent.
The legal sector has seen an increase in the number of strategies being developed around diversity as it becomes an important factor regarding both client relationships and firm culture. As such, many firms have invested in hiring top talent from a variety of sectors to help lead their Diversity & Inclusion initiatives. Diversity managers including Daniel Danso, who joined Linklaters from LGBT rights charity Stonewall, and DLA Piper’s Mitra Janes, who previously worked at Ford Motor Company are some examples of the leading professionals transforming the legal landscape.
Gender equality in the UK legal sector is a topic recently explored in an article by Fides Search “The Path to Parity: Reassessing Gender Balance within UK Law Firms”. To request your copy of the article, please contact email@example.com.
Movers and Shakers of the week
Real estate head Ciaran Carvalho has been elected as Nabarro’s new senior partner, commencing his role on 1 May
Chief executive David Kerr has been re-elected into his role for the next three years, whilst Italian managing partner Massimiliano Mostardini has been newly appointed chairman
Leveraged and acquisition finance specialist James Johnson will leave Clifford Chance and the legal sector after 16 years at the firm
Zaha Hadid Architects has hired Tamsyn McLean as general counsel. She joins from Balfour Beatty Investments where she served as senior commercial manager
UK head of competition at DLA Piper Kate Vernon has joined Quinn Emanuel Urquhart & Sullivan as the second partner in their London competition practice
Alastair Mordaunt will depart from Clifford Chance’s London office to relocate to Hong Kong and lead Freshfields Bruckhaus Deringer’s Asia competition practice
Greenberg Traurig’s chair of employment, incentives and pensions group Manteo Heikki Eisenlohr has joined K&L Gates in the firm’s labour, employment and workplace safety practice
Latham & Watkins partner Rudolf Haas will join King & Wood Mallesons in the Frankfurt Corporate team
Former Skadden partner Matthew Cowie has joined Dechert’s white collar team in London
Islamic finance partner Shakeel Adli departs Norton Rose Fulbright to become a partner in CMS’s banking and finance practice.