The Week: MC Suffers Again – A&O's 44m Pound Bombshell. Training Contracts Squeezed. Vac Schemes Cancelled. Yelp!
The City is reeling after the oft considered ‘friendly face’ of the Magic Cirlce, A&O, delivers the hardest body blow so far. The firm announced yesterday a 9% reduction in headcount (approx 450 jobs) across its international network which looks set to cost them £44m. The cull equates to approximately 47 partners and almost 200 associates losing their jobs, a similar number of support staff also face the axe. Half the cuts are expected to happen in the London …
The City is reeling after the oft considered ‘friendly face’ of the Magic Cirlce, A&O, delivers the hardest body blow so far. The firm announced yesterday a 9% reduction in headcount (approx 450 jobs) across its international network which looks set to cost them £44m. The cull equates to approximately 47 partners and almost 200 associates losing their jobs, a similar number of support staff also face the axe. Half the cuts are expected to happen in the London headquarters. In addition, it is understood that a further 35 partners will be forced to accept a reduced share of equity and that remaining partners will be asked to inject an average of £30,000 to raise the firm’s working capital by £11 million. The private client team will be jettisoned. Salaries will be frozen at 2008 levels. No holding back…
A&O’s website carried this message from, Wim Dejonghe, global managing partner, "In the rapidly changing environment in which we operate, the reality is that there is simply not enough work to keep all our people sufficiently busy and we do not see that changing in the near to medium term. We have reluctantly taken the difficult decision to act now, from a position of financial strength, so that we can offer better terms to our departing people than might otherwise be the case….Our priority is to minimise the impact on the morale of our remaining people and continue to serve our clients well ."
This year Magic Circle rivals Clifford Chance and Linklaters have already announced substantial job losses. Although Freshfields has not announced a major restructuring program it has moved to freeze all salaries at 2008 levels. Slaughter & May have remained eerily quiet on this front…
Finally, following news earlier this week that the Law Society of Scotland has had enquiries about TC terminations and our post yesterday on training contract deferrals, Norton Rose are understood to have now confirmed that they are offering students who were due to join the firm in 2009 and 2010 up to £10,000 to defer their start dates (source: RollonFriday ). Yes please.
February 20, 2009
To be honest, A&O deserves some creds for doing everything at once, at all levels.
It’s not like partners will get away unscathed, are they.
February 20, 2009
What is going to be interesting is how law firms in the future pitch their career opportunities to lawyers who might want to join them.
“We value commitment.” From you but not from us.
“We take the long term view.” But don’t think we care.
“Our talent is our greatest resource.” You obviously don’t have any which is why we are getting rid of you.
That’s going to be fun to watch. At least with banking you knew it was only for the money.
February 20, 2009
If Clifford Chavs want to be the world’s top international law firm then they really need to go back to basics and ensure that they offer value for money to clients. They seem to carry a lot of deadwood partners who don’t care about providing excellent legal services but only care about clinging on to their partnership.
February 20, 2009
that is harsh stuff for A&O associates
February 20, 2009
Not so “friendly face of the magic circle” now! I wonder how they’re going to spin this one. Most of the people I know at A&O are still busy. It’s all about that magic PEP.
February 20, 2009
Hello.
Things are rubbish. We are doing everything all other firms have been doing, but we are doing everything at once.
Hope there were no elderly of counsel with weak hearts in the audience.
February 20, 2009
Everything at once, yep that must be great
masochist