Partners of London-based firm King & Wood Mallesons’ (KWM) have until the end of this month to fork out more than 14 million pounds as a fresh capital injection to the cash-strapped outfit.
With the capital infusion, KWM has committed to a deadline for overdue profit distributions owed to partners for the 2014-2015 fiscal year by May 2017.
The capital will come mostly from salaried partners who were asked by former partners to contribute at least 60,000 pounds each. Meanwhile, equity partners on the 20-60 remuneration point ladder have been asked to shell out an additional 4,000 pounds per point.
On the capital infusion, a former KWM partner said in a previous report, “It’s long overdue. The firm has very little capital available and there is an endemic lack of cash in the business, but as a strategic move it’s probably a sensible one.”
In another move to cope, KWM cut its 17 practice areas down to three, which it said was the first stage of a strategic plan. It also undertook a partnership review, where 15% of its partners left the firm.
The firm has suffered from low capital contributions. The company has often credited the lack of available capital as the reason for delays in partner profit distributions, which date back to 2014.
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