DLA Piper’s non-US business – including the UK, continental Europe and Asia-Pacific – announced the move yesterday, although it was technically implemented at the beginning of May, following a lengthy partner vote that concluded in March. Previously, partners were split across three tiers, including those with full equity status, and those with salaried and fixed-share positions.

Removing barriers to earning

According to London based newspaper Legal Week, at the end of last December the firm had 743 full-time equivalent partners, of which 252 had full equity status. In securing the all-equity structure, the remaining 491 each contributed an average of £61,000 to join equity and generate the £30m capital.
Fellow London-based legal sector newspaper The Lawyer reported that DLA’s co-chief executive, Nigel Knowles, said the switch ‘was done for a number of reasons: to align us with the US side of the firm [which switched to all-equity in 2008], to give everybody the same interest in the firm and to take away artificial barriers to earning’. It is hoped that partners will be motivated by a direct share of profits, and an equal vote in decisions.

Reducing bank debt

The move will also reduce DLA Piper’s bank debt, which in 2010-11 stood at £71.1m, down from £88.5m the previous year. DLA piper recently released strong financial figures for 2011-12, with a 16 per cent increase in revenue, and 5.7 per cent growth in profit per equity partner (PEP).
More generally, Legal Week reported that across the UK top 50 firms there had been a second consecutive year of growth, with PEP rates pushing towards boom-time highs.