King & Wood Mallesons’ (KWM) partners have paid in £14m of additional capital to the firm, it has emerged.
The firm said it was pushing ahead with its capital call after 98 per cent of its Europe and Middle East (EUME) partnership voted in favour of the move.
The recapitalisation is the “third stage” of the firm’s “strategic plan to strengthen its EUME business”, said a spokesperson.
The first saw it reorganise its 17 practice areas into three core groups, and secondly it restructure its regional partnership with around 23 partners and 45 business services staff leaving the firm.
“Addressing the capital position of the firm in EUME is the final part of the plan”, the spokesperson continued.
The firm mooted a capital call last month, with plans laid out by head of investment funds Michael Halford to double partner contributions and ask salaried partners to stump up cash.
Partners were expected to pay in an extra £4,000 per point, which is around double the current contribution for equity partners.
Salaried partners were asked to pay £60,000 into the business each, marking the first time KWM has asked salaried partners for capital contributions.
The cash call across the Europe and Middle East business follows repeated delays to quarterly profit distributions over the last 18 months. The firmlaunched a review of its contributions structure in January in a bid to stem partner exits.
The Lawyer understands a proportion of the delayed distributions may be cancelled to lessen the amount of cash equity partners have been asked to pay into the firm.
The review followed the resignation of regional managing partner William Boss, who has not been replaced, and COO Rachel Reid, who left for Taylor Wessing.
KWM then launched a restructure to cut around 23 partners from the region to lower costs. It followed a similar move to “trim the equity” in Europe and the Middle East in 2015 when around 15 per cent of the partnership was managed out.
The firm has also lost a number of its bigger billers in London in the last year, including Gregg Beechey for Fried Frank, Simon Fulbrook to Goodwin Procter, Richard Lever to Goodwin Procter, Tim Wright to DLA Piper, and Alex Leitch to Covington & Burling.
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