More than 20 of Latham & Watkins’ equity partners have made it into the elite firm’s ‘super points’ band, which is intended to better reward star performers by allowing them to earn nearly double the profit share of those at the top of the firm’s core lockstep.
Legal Business has learned that 22 Latham partners now sit within the so-called ‘super points’ tier.
Fourteen partners worldwide are understood to sit on the first additional tier at 1,300 points, with a further eight now on the maximum 1,700 points. Two partners in London – including chair Richard Trobman – are understood to be at the top level. All of the remaining super pointers are based in the US.
Latham’s core modified lockstep ladder runs from 350 to 900 points, with 900 points equating to more than $5m last year, meaning that 1,700 points would nearly double this figure.
On top of this, Latham also has a bonus pool of up to 15% of its profits available for discretionary division among partners. Combining this bonus with super points it is understood that total partner comp can now climb above the $15m mark for star performers.
Latham partners approved the new remuneration structure in July, with equity partners taking part in a weighted vote based on points allocation rather than a one-person, one-vote system.
The move came amid intense competition to attract and retain talent at the very top of the US market, where firms like Kirkland and Paul Weiss have been linked with packages above $20m for a handful of partners.
Sources told LB that no partner joining as a lateral will be granted immediate access to the higher remuneration rungs. Instead, they will have to wait at least two years before being eligible for consideration, suggesting that, for Latham, the changes are focused on retaining, rather than attracting star performers.
A spokesperson for Latham said: ‘Changes to the firm’s equity compensation structure were made after an in-depth review and extensive discussions and meetings in each office to ensure a transparent and thorough process. This provided the firm’s leadership with the opportunity to receive direct feedback from the partnership before moving forward. The changes to the firm’s compensation structure allows the firm to reward more partners in its year-end bonus process.’
Latham has seen a series of departures in London over the last year. This summer a five-partner strong leveraged finance team led by Jayanthi Sadanandan and Sam Hamilton left for Sidley. Around the same time, Milbank announced the hire of a six-strong team of finance lawyers from Latham, headed by collateralised loan obligation (CLO) partner Alex Martin.
Earlier this year, litigation and trial partners Oliver Browne and Stuart Alford KC left for Paul Hastings. Browne’s exit from Latham came after 18 years at the firm, having most recently served as the London co-chair of the litigation and trial department. This follows the departure of restructuring and special situations partner Simon Baskerville who moved over to Willkie Farr at the end of last year.
Less than two years ago, Latham also saw the departures of finance partners Mo Nurmohamed, Ross Anderson, Karan Chopra and Rob Davidson who left for Paul Hastings. Nurmohamed joined as co-chair of the firm’s global finance practice.
The traffic has not gone only one way though, with the firm adding Jonathan Brownson, Joydeep Choudhuri and Prue Criddle from New York banking heavyweight Cahill Gordon & Reindel’s City office, in May this year.
Its partner remuneration overhaul comes amid intense competition at the top of the US market, prompting numerous firms to reconsider how to attract and reward their standout performers.
Latham posted a 6.9% revenue hike to almost $5.7bn for the 2023 calendar year, with profit per equity partner up 7% to $5.52m.
LB has decided not to name the partners on super points.
This article first appeared on Legal Business.