Freshfields Bruckhaus Deringer has taken steps to protect its Asian partnership from U.S. firms' advances by breaking away from its lockstep and allowing new partners to be promoted more quickly in the region, it has emerged.
The overhaul has seen partners give management permission to offer more flexible remuneration packages in the region to retain talent, with the partner vote in mid-2011 coming in the wake of a number of high-profile departures to U.S. firms.
It has resulted in several partners being offered above-lockstep pay packages and it is understood that about two partners in the region are currently on sweetened deals. The top-up to pay is understood to be around an additional 30 percent of lockstep.
In a related move, the firm can also now accelerate the promotion of Asian associates in exceptional circumstances and bring them in above the bottom rung of the firm's lockstep ladder, which runs from 17.5 points to 50 across all of its offices. Generally, associates need at least six years' post-qualification experience to make partner.
The increased flexibility, which applies only in Asia, represents a significant departure for Freshfields which has previously shied away from changing its pure lockstep model, which does not allow partners to be moved up or down the ladder.
It is believed Freshfields also offered a more flexible remuneration package to the former Dewey & LeBoeuf Silicon Valley corporate team, led by Richard Climan, which the firm courted over the summer.
The changes at partner level come after the firm last year opted to increase base salaries for corporate transactional associates to match those available at Wall Street leaders, which have been raiding U.K. firms at both partner and associate level in recent years.
Freshfields' former China corporate head Christopher Wong left for Simpson Thacher & Bartlett's Beijing office in May 2011, while former Hong Kong managing partner Kay Ian Ng went to Sullivan & Cromwell a month later.
One City corporate partner from a Magic Circle rival said: "It is extremely difficult because you're damned if you do and you're damned if you don't. It's inherently unfair on partners in London and Germany who are probably making more money. That said, if you believe Asia is the future -- and a lot of people do -- you want to be in that market with the top people."
One Freshfields partner said: "There is a shortage of good talent [in Asia]. We need to create the most attractive employment proposition that we can and we're also competing with the investment banks and accountancy firms for talent."
Freshfields carried out a general review of its lockstep last summer, with a view to reducing the number of partners at the top of the ladder. Modifications discussed included giving senior partners the opportunity to take a five- or 10-point reduction in their share of the profits in exchange for a reduced working week, but the firm opted not to make changes.
News of the remuneration changes comes as Freshfields gears up to reopen in Singapore this month, five years after closing in the country. The office is being led by co-head of global capital markets Stephen Revell, who is relocating to the region from Hong Kong, and corporate partner Gavin MacLaren, who joined the firm from Australia's Allens in April.
Freshfields - key departures in Asia
Kay Ian Ng to Sullivan & Cromwell -- June 2011
Christopher Wong to Simpson Thacher & Bartlett -- April 2011
Antony Dapiran to Davis Polk & Wardwell -- August 2010