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Partner profits halted amidst GFC fears
A number of high profile law firms have joined the growing list of those holding back or abandoning partner profit distributions as a result of the global financial downturn.
The New Lawyer
Top 15 UK firms Pinsent Masons and DLA Piper have both withheld profit distributions in the past three months, along with CMS Cameron McKenna, in response to the market conditions, reports Legal Week.
Pinsents has withheld its last two quarterly profit distributions, with the firm attributing the "profits distribution holiday" to a series of management responses to the recession. It is due to make its next quarterly payment as planned in December.
DLA Piper, meanwhile, held back its August distribution firmwide and has yet to decide on its next payment, due in November. The firm changed its system in 2005 to pay each partner's quarterly distributions only if billing targets are reached on a firmwide, group and individual level. Monthly distributions have continued at both firms.
The announcement comes on the back of Ashurst and Camerons revealing that they have paid out reduced quarterly distributions to partners during the past year.
Ashurst confirmed that full monthly drawings had been paid out but said quarterly distributions, which are not made at predetermined rates, had been smaller in recent months.
Similarly, Camerons has reduced distributions after introducing a system last year that ties profit payments to billing targets.
Other firms in the top 15, such as law firm Lovells, have not reduced quarterly profit distributions, but have made it easier to do so, if required. This brings them in line with firms such as Allen & Overy, which already had a system like this in place.
