Redundancy Watch: Linklaters 270, Hammonds 77, Mo Fo and Banks. But Some Aim to Retain.
With the downturn really starting to take its toll on the professional workforce, there is of course a lot of bad news out there and many firms have little option other than downsizing to survive. However, there is a creeping level of criticism aimed at firms suspected of using the crisis to restructure for the sake of profit. Interestingly some firms are responding by looking for alternatives to the slash and stash route. First the bad news… Linklaters has begun …
With the downturn really starting to take its toll on the professional workforce, there is of course a lot of bad news out there and many firms have little option other than downsizing to survive. However, there is a creeping level of criticism aimed at firms suspected of using the crisis to restructure for the sake of profit. Interestingly some firms are responding by looking for alternatives to the slash and stash route. First the bad news…
Linklaters has begun its "New World Strategy" by announcing a formal redundancy consultation with up to 120 lawyers and 150 business support staff in London. All of its UK staff are involved in the consultation, which is likely to see between 100-120 lawyers and 130-150 business services staff losing their jobs. Although not announced, a number of partner exits are expected to follow over the coming months. It is understood that Trainees will not be affected by the cuts but according to The Lawyer managing partner Simon Davies would not confirm whether the number of people being offered training contracts in the future would be.
Hammonds has confirmed that 77 members of staff have lost their jobs as a result of its redundancy consultation launched in November. Fifty-three support staff and 24 fee earners have been laid off following the consultation mainly in its corporate and real estate departments. This is lower than expected as many of the fee-earners involved in the consultation were redeployed elsewhere in the business, a crumb of comfort for associates elsewhere.
Meanwhile, US firm, Morrison & Foerster announced that it is making 53 lawyers redundant across its offices in the US. At this point there is no suggestion that its offices in London will be affected.
And, in-house lawyers at banks are also facing uncertainty. Following the news that 6 are to go at Bank of America/Merrill Lynch yesterday , speculation is mounting at many of its rivals including JPMorgan, Lloyds TSB, Royal Bank of Scotland and Barclays.
Despite all the bad news and the cynisism directed at firms axeing junior lawyers and support staff whilst attempting to maintain PEP, there are some positive moves afoot…
Legal Week has reported that some of the UK’s top law firms have started putting together back-up plans in a bid to minimise lawyer job cuts over the coming months. This looks set to be something of a PR coup if firms manage to pull it off without damaging their performance in the long term.
The firms purported to considering such moves include Simmons & Simmons, Taylor Wessing, Wragge & Co and Ashurst. Several are considering asking associates to take a period of unpaid leave – Ashurst is understood to have already offered this option to associates. Wragges has apparently had more than 20 associates take up sabbaticals and extended maternity leave as the firm attempts to avoid the need for further losses. Other options firms are considering include a four-day week in some circumstances.
In another positive bit of news The Lawyer reports that Trainee retention rates appear to be holding up (well at MC firms anyway). Although, what nervous/fired associates think of that, one only has to imagine. Is this sensible long-term practical planning for the upturn or cynical PR to preserve images for the long term???
January 29, 2009
wonder if links would had plans to restructure before the downturn. this seems pretty drastic given their last set of results. maybe the downturn has just given them an opportunity to make sweeping chnages instead of incremental ones.
January 29, 2009
ba$t**ds
January 29, 2009
business sense to cut back on expensive associates in a downturn. even more so if you have a comprehensive strategy for the future which requires quite a fierce change of direction. business is business and law firms are businesses. you want security go work for one of Brown’s soviet style councils
January 29, 2009
linklaters have a solid name which may suffer a bit of a short term backlash from this move but they obviosly have a sound plan for the future which required tough decisions
January 29, 2009
They are either totally desparate for reasons unknown or totally ruthless for reasons of greed!
January 29, 2009
I agree with 4 to some extent. Unlike smaller firms that don’t want to damage their image with potential recruits, Linklaters can probably get away with this as they will attract the sort of trainees who see tough business love as a good thing and go in with their ‘eyes wide open’.
January 29, 2009
I have uni friends who have worked at Links; they knew it would be tough at the top but there has been growing resentment for management recently – knowing you are playing with fire and actually getting burnt are two different things. Being kicked in the balls hurts whether you are a tough guy or not.
January 29, 2009
There is a lot of speculation about Linklater’s motivations on this and that is probably what it will remain. Fundamental problems seem unlikely but are always possible so restructuring may be ‘necessary’ in the literal sense – yea right. Seems soft credentials are rapidly wilting as some firms start to come clean about the only thing that really matters to them – profitablity. What an opportune time to rid yourself of your least profitable clients and least profitable employees in a bid to stay at the top of the PEP tree.
Business is business but the veneer of humanity in the good times smacks of hypocricy when a few scratches reval what lies beneath.
January 29, 2009
Associates may not like it but they didn’t mind bloated starting packages and they status that came with them. You have to roll with the punches whatever you do. Links, Clifford Chance and others seem to me to be making practical decisions in the best interests of their businesses in the worst downturn since the WW2.
January 29, 2009
Linklaters are the best in the City. Others should watch and learn – the firm will be even further ahead of its competitors when things improve.