June 30, 2011 3:04 PM
SNR Denton to Toughen Exit Terms As More Partners Quit London Office
Posted by Chris Johnson
SNR Denton is set to take a tougher line on partner exit terms in an attempt to stem the flow of departures from its London office, reports Legal Week. The trans-Atlantic firm is considering enforcing an existing policy that would allow it to hold senior equity partners to one-year notice-of-departure periods, after two more key partners resigned this week.
Regulatory head Chris Borg and senior banking partner Michael Black are both leaving the firm to join Reed Smith and Norton Rose, respectively, Legal Week reported. The departures follow those of advocacy chief Rory McAlpine and the firm’s sole social-housing financing partner Ian Roberts, who joined Skadden, Arps, Slate, Meagher & Flom and Pinsent Masons earlier this year.
Each of those partners and the firms they are joining are currently in negotiations with SNR Denton’s management over release dates, according to the Legal Week story, and none have been put on gardening leave--a common practice among U.K. firms, where departing lawyers are forced to see out their notice period on paid leave.
The departures followed revelations that the firm's U.K. arm was struggling financially after the September 2010 merger between London-based Denton Wilde Sapte and Sonnenschein Nath & Rosenthal.
Partners at SNR Denton were informed during a meeting on June 27 that profits for the fiscal year ended April 30, 2011, had dropped 36 percent to just £232,000 ($370,000), Legal Week reported. Gross revenues also fell during the year, declining 8 percent to £154.4 million ($248M). SNR Denton chief executive Elliott Portnoy, who is in London this week, pledged to partners to bring average partner profits back to £400,000 ($640,000) during the current fiscal year.
"In a year of transformation for our firm, including the addition of over 50 partners worldwide, the tough climate of 2010-11 did not meet the economic aspirations of our EMEA business," SNR Denton's Europe, Middle East and Africa (EMEA) chief executive Matthew Jones said in a statement announcing the U.K. arm's financial results. "However, based on steps being taken by the new EMEA board and improvements in trading, we are budgeting for a substantial turnaround this year. Accordingly, the year-end financial results do not reflect our present direction, and we are planning for significantly stronger profitability across the firm."Make a comment