The Week: Denton's Cash Call, Herbies Sweet Partner and Mayer Brown Associate Assistance
Politicians can’t monopolise all the excitement this week despite their best efforts… The collapse of GM is a stark sign of the times. Financial results are trickling out of firms with Denton Wilde Sapte the latest – the firm revealed a 36% fall in partner profits and also confirmed that it has asked equity partners to contribute an average of £90,000 of capital into the business. PEP was down to £300,000 from £470,000 last year – this is the sharpest …
Politicians can’t monopolise all the excitement this week despite their best efforts…
The collapse of GM is a stark sign of the times. Financial results are trickling out of firms with Denton Wilde Sapte the latest – the firm revealed a 36% fall in partner profits and also confirmed that it has asked equity partners to contribute an average of £90,000 of capital into the business. PEP was down to £300,000 from £470,000 last year – this is the sharpest fall in PEP yet announced by a major UK law firm this year. The general effects of the recession and the firm’s restructuring following its redundancy consultation concluded in March (with the loss of 76 jobs) hit the firm’s profits hard.
On lighter matters, this week saw another member of the profession wheeled out to create some show-business magic. Following in former superior Margaret Mountford’s footsteps, Alan Watts, Litigation Partner at Herbert Smith, arrived on the show to interview the finalists. Watts boasts Sugar as one of his clients at the firm where Margaret Mountford was previously a corporate partner before joining Sugar’s business as a non-executive director. The Lawyer revealed that: Watts said had had a run in with Mountford while she was a partner at the firm and he was a junior lawyer, adding that she was as formidable a presence off-screen as she is on-screen . Critics’ conclusion: a fine lawyerly performance by the "hot-shot City litigator".
In the US, Mayer Brown has gone beyond the call of duty done the decent thing in helping out associates laid off in April. The firm has arranged for nine of its laid-off associates to work full-time for corporate clients at a reduced salary of $60,000 (£37,000). Better than unemployment then but something of a climbdown given that an first-year associate at Mayer Brown normally makes $160,000 (£98,000). According to Legal Week some of the other associates approached were making as much as $200,000 (£122,000) before losing their jobs but only a couple wouldn’t accept the offer.
So not the worst week in law but we can’t deny that most of the attention is focused on the political arena at the moment. If anyone thought that interest in politics had died in the UK, then surely the last few weeks will have reversed the trend a smidgen even if it is for all the wrong reasons!
June 5, 2009
The lawyer on the Apprentice was rubbish.
The guy he replaced was much better for the job, aggressive asshole.
June 5, 2009
what has george galloway got to do with anything he has to be the most ignorant moron we have in british politics and that is saying something
June 5, 2009
apprentice sucks
June 5, 2009
The blondie is cute though even if she did get a first from a poly
June 5, 2009
On a more serious note, it’s about time the big cheeses in some of these firms returned some of the massive amounts of cash they have been siphoning off. £470,000 is obscene.
Hopefully the clients will realise that the structure of these massive firms which allow these kind of PEP figures works against their interests just as much as it does against the majority of lawyers who are lower down the pyramid.
There is every bit as much the need for change in our profession as there is amongst the bankers, who have been stealing from the rest of us for decades.
June 5, 2009
I agree with number 5 but the sort of changes required would be major and structural i.e. they would need to be made by the people who most benefit from the status quo. Even with new managers arriving at the top, it is rather like expecting an incoming government to hand back power once they control the levers; not that likely whatever they promise. Any parallels here?
June 5, 2009
Number 5 here again. I think that, as with the banks, they may be forced into it by circumstances.
The major clients including the banks and property magnates are all in a mess and realise that they need to stop wasting money. Their new managers are going to be largely from the second tier.
These people are already screwing law firms down on costs and are quite rightly cutting back on what their companies are prepared to pay.
The pyramid structure is under assault, because the top tier need an army of worker ants underneath, billing all hours god sends at ridiculous rates. These ants are being removed bit by bit as less work and lower costs cause more redundancies to bite. That’s how PEP falls and the owners either have to put cash in or seriously reduce what they take out.
What it needs now is for those redundant lawyers to form their own firms and give the value for money the clients want. It needn’t mean them cutting their income either.