Clifford Chance has moved to head off a cash crisis as it informs partners that it will not be paying their July profits distribution in order to comply with loan covenants. The move comes as it raises its borrowing limits by an extra �50m to cope with London and New York property costs.
Finance director Chris Merry is understood to have told equity partners that the July distribution - which also coincides with the firm's twice-yearly tax bill - will probably have to be delayed by several months because cash collections have been too slow. The quarterly payment would have represented approximately �70,000 for each plateau partner before tax.
That's a lot of cake. The article, which is here from the UK's The Lawyer.com, points out that this happened once before, in 2000, and that the firm is still making plenty of money.