Canadian Lawyer

partners have retired on the job, but haven't informed the firm." Ed Wesemann, a consultant at Edge International, says de-equitization is particularly popular in the U.S. and U.K., where law firm finances and part- ner profitability rates are much more public than in Canada. By shifting an equity partner into the non-equity ranks, law firms are able to give a boost to their profit-per-equity-partner rate, a key indicator of law firm performance. "It's very hard to fire an equity partner, but it's a little easier to make them into non-equity partners. The biggest prob- lem with equity partners is when they don't have their own supply of business. So this is a good place to park them, and Reach one of the legal and business markets in largest you can usually give them a little cut in pay, and helped the statistical base. Nobody makes any more money, but the math looks a little better. Canada! report on the top 200 firms in the coun- try released in December, 39 per cent of managing partners said their firms de-equitized partners in 2011, and 38 per cent planned to de-equitize more in 2012. In the U.K., Magic Circle firm Clifford Chance LLP began consulting partners in April on a new termina- tion policy that will allow them to ship out under-performing partners more quickly. That came on the heels of a partnership restructuring by Clifford Chance's rivals Linklaters, which result- ed in the departure of 25 partners and the demotion of 16 more. De-equitization also comes into play According to an American Lawyer " for partners reaching retirement age. In addition to a training ground for lawyers on their way up, Margolis says non-equity partnership is also a "good spot for people to rest in on their way down." "We have some senior people who are still valuable for us, but not in the position to, or not wanting to, devote themselves in quite the same way as we expect of an equity partner, he says. "It's a way of keeping them in the fold, but appropriate to their contribution." Colin Cameron, the president of Vancouver-based Profits With more than 192,000 page views a month, canadianlawlist.com captures your market Th e all-new canadianlawlist.com features: — A fresh new look, designed for improved user experience — Eff ective new ways to reach the legal market — Gold and silver advertising packages For more information contact: Colleen Austin at 416-649-9327 or toll free at 1-800-387-5351 colleen.austin@thomsonreuters.com 30 JULY 2012 www. CANADIAN Lawyermag.com Management Consulting Inc., says Canadian firms are pushing manda- tory retirement ages earlier, with the phase-down process beginning as soon as the partner's 60th birthday in some shops. "To maintain their profit levels, the business model requires partners to move out of the equity partnership ranks in the 60- to 65-year range. The move down to non-equity status is the most common first step, for Partners large Canadian firms especially, they have to be financially as strong and capable as they can to defend them- selves against much other bigger, and international players, like Norton Rose. There's more parties going for a smaller " he says. "In " just compensating them " he says. "You've done something Online Print and in

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