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In a closely watched case, a former Freshfields Bruckhaus Deringer partner is claiming that the firm’s new pension plan discriminated against him on the basis of age. The dispute, now being heard in a London employment tribunal, has laid bare Freshfields’ recent reform of its unfunded pension scheme. It’s one of the first cases brought under new age discrimination laws that came into force in the United Kingdom last October. Former restructuring partner Peter Bloxham argues that the revised pension plan, approved by the partnership in 2006, is discriminatory because it reduces future pensions for partners who were younger than 55 in 2006. Until it reformed its pension arrangements last year, Freshfields was the only major City firm to have an unfunded scheme still in place. Bloxham claims that the new pension plan effectively forced him to retire from the firm October 31, 2006, in order to hold on to a significant proportion of his annuity. Under the new plan, Bloxham’s status as a 54-year-old partner April 30, 2006 � the end of the firm’s financial year � entitled him to retire with 80 percent of a full pension for life, about �175,000 ($355,000) each year at current values. The alternative was to remain a partner at the firm until he was 55, when he would be entitled to a much less generous pension lasting only 25 years. Partners who were 55 by April 30, 2006, and who retired by the end of October last year, however, were entitled to collect a full pension. Freshfields offered some of its top-performing partners aged 50 and over the opportunity to retire from the partnership but remain with the firm as consultants while retaining the more generous pension entitlement that they would have enjoyed under the old system. Part of the testimony this week centered on whether Bloxham was offered a consultancy at the time of his retirement. He claims that he was not offered a consultancy until after he had tendered his resignation, while Freshfields maintains that an offer was open to him, but that he dismissed it out of hand. The case has also focused on Freshfields’ recent culling of some equity partners and its introduction of nonequity or fixed-share partners through an initiative known internally as “size and shape.” In his witness statement, Bloxham claims that the pension reform and the introduction of fixed-share partners were both motivated by a desire to raise Freshfields’ profits “to a level which would set it firmly among an elite group of firms worldwide.” In its defense, the Magic Circle firm claims that the new pension plan was a “proportionate means of achieving a legitimate aim” � maintaining retirement benefits while reducing the burden on younger partners. Under the old pension plan, partners who had spent 20 years in the partnership were entitled to a lifetime annuity equivalent to ten points on the firm’s lockstep, the cost of which was borne by partners still at the firm. The amount paid to retired partners could not exceed more than 10 percent of total profits � but as the number of retired partners grew, this 10 percent cap was expected to be reached by 2018. The case, which is due to last until the end of next week, has seen Freshfields senior partner Guy Morton and managing partner Peter Jeffcote testify so far. Chief executive Ted Burke, finance practice head Perry Noble, and finance partner Bob Charlton are also slated to appear. The dispute has attracted the attention of labor and partnership specialists, as it is thought to be the first case involving a partnership since new age discrimination rules came into force in October 2006. Previously the U.K. had no laws dealing specifically with age discrimination. Crucially, the new regulations allow parties to defend themselves against claims of direct or indirect age discrimination. The employment tribunal where the Freshfields case is being held is a type of low-level court originally designed for small-scale employment disputes. The tribunal hearing comes at the start of a period when Freshfields will be firmly in the public eye. In early August two of its partners, Tim Jones and Barry O’Brien, face a disciplinary hearing before the Solicitors Disciplinary Tribunal over their roles in acting for businessman Philip Green on his failed 2004 bid for retail giant Marks & Spencer Group plc. Freshfields was kicked off the deal after M&S counsel Slaughter and May successfully argued that Freshfields had a conflict as a former adviser to M&S.

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