Each time the reorganization was in pain

Rumours swelling for some time, but the departure of the historical pillar of the law firm of Freshfields in Paris leaves malaise burst to the big day: fifty-eight years, Yves Huyghé of Mahenge chose to leave the English firm and join the American firm Leboeuf, Lamb, Greene & MacRae. This would be one movement as another in the grand Mercato, recruitment of lawyers in Paris, if it showed the willingness of reorganization in March forced the English firm after the arrival of a new team to its management in January 2006. Sign to sign, in a legal market of increasingly more competitive, Freshfields, ranked among the finest global firms, with more than 200 lawyers in Paris for a turnover of 106.5 million euros (882 million pounds for the global turnover), is forced, in turn, to operate its molt to safeguard its profitability. The restructuring takes two forms more or less painful: a new pension plan for the partners and a relaxation of their remuneration system.

The partners had until now of extremely generous retirement plan which allowed them to continue to receive a portion of the benefits of Office ad vitam. "In view of demographic trends, the system was more tenable", said Konstantin Mettenheimer, one of the patterns of the cabinet at the global level. Participation in the benefits of pensioners will therefore now limited in time and (the "pension" shall not exceed 7.5 of the total benefit of cabinet). The partners who have reached the age of retirement (between 55 and 62) had until 1 November to choose: benefit from the former regime and go, this is the case of Yves Huyghé of Mahenge possibly remaining consultant to cabinet or stay but must opt for the new regime. They were 32 partners on more than 500 worldwide to choose from.

More painful is the reorganization of the system of "lockstep", a system of remuneration attributed to all the partners share equal benefits regardless of their sector of activity and profitability. Now, a new category of partners is created: the FSP ("fixed share partners"), whose remuneration will be 50 lower than that of other partners. Those with structurally or cyclical the sector less profitable will FSP and will have therefore their remuneration. The system will be effective on May 1. The firm promises that the number of FSP will remain very limited.

To adapt to competition

"We cannot say anything for the moment, it depends on a strategic analysis of the market and the discussions that we can have one and the other" answers evasive, Jean-Luc Michaud, Member Parisian of the global Board of Directors, before admitting that "humanly it is very difficult." "It is like a House of cards which collapses," said amer, a former partner. "We need to adapt to competition and the needs of our customers." "It is vital to the sustainability of the cabinet," says Konstantin Mettenheimer.

In fact, which had been the success of the firms of the Magic Circle which brings together the finest law firms in London, is today a serious handicap in the race for profitability. Competitive American firms, to the commoditization of products, English firms have had to restructure. Their system of remuneration had enabled them to hire the best lawyers in Paris in the 1990s. Today, their tenors are solicit by more profitable firms. Before, Freshfields, Linklaters, Allen & Overy, Simons & Simons had to restructure in the early 2000s. Each time, the reorganization was in pain. "We thought able to avoid it," admits Jean-Claude Cotoni, the patron of the Paris Office. In fact, the cabinet, which has also had to digest its merger with the German Bruckhaus Deringer in 2000, has left to spend time. Now we must move quickly.