The Week: Vital Signs Not Improving – DLA Headcount, Herbies NQ Retention, Cobbetts and FFW Financials and Miner Lowers Legals
Despite the fact that law firms are generally seeing growth (albeit at a slower rate than previously) news of 10,000 expected job losses still strikes a chilling chord for those at the bottom of the chain. At the same time, the results of Legal Week’s staisfaction survey hints that such worrying statistics may also be changing young lawyers’ perceptions of what they can expect in a legal career and therefore what they find satisfying. Actually having a job and …
Despite the fact that law firms are generally seeing growth (albeit at a slower rate than previously) news of 10,000 expected job losses still strikes a chilling chord for those at the bottom of the chain. At the same time, the results of Legal Week’s staisfaction survey hints that such worrying statistics may also be changing young lawyers’ perceptions of what they can expect in a legal career and therefore what they find satisfying. Actually having a job and some work to do whilst in the office might be just be fulfilling enough right now!
As if to demonstrate, DLA Piper has launched a second round of job cuts in the Middle East; the firm cut 9% of staff in the region last week with cuts effective immediately. In total 22 people including one partner, eight fee earners and 13 support staff were shown the door across the firm’s offices in the region. Dubai was hardest hit.
Meanwhile, Herbert Smith’s NQ retention rate has fallen to 74% down from around 90% last year. The firm is to retain 48 of its 65 trainees set to qualify in September.
And in the latest financial results, national firm Cobbetts has seen a 16% dive in fee income for the last financial year from £58m to £48.5m. Average profits per equity partner are yet to be announced. And Field Fisher Waterhouse has recorded an 8% growth in turnover from £88m to £95m but expects a slump in PEP after last year’s high of £750,000.
On top of all this…
All the talk of outsourcing by law firms might have made future lawyers and associates even more fearful about the legal job market but now firms themselves may be feeling the heat. Rio Tinto has agreed with outsourcing provider CPA Global to outsource legal work to a team of lawyers in India. Baker & Mckenzie, Herbert Smith and Linklaters all currently act for the mining giant. It is thought that a CPA lawyer would cost around $250 per day, which is “less than a very junior lawyer at a major law firm”, about 7 times less apparently – the aim is to reduce Rio Tinto’s annual legal spend by 20%. CPA Global will provide 12 Delhi-based lawyers to handle tasks such as contract review, drafting and legal research.
So if you can’t be a banker, you can’t be a lawyer and you wouldn’t wan’t to be a politician you might just consider becoming a formula 1 driver instead.
June 19, 2009
Lets face it a lot of people become lawyers for entirely the wrong reasons and then wonder why they are miserable. Maybe the tightening of the opportunities in the profession will weed out those who shouldn’t be in it anyway.
June 19, 2009
fair point
June 19, 2009
Law can be a good springboard for other things even if you don’t intend to be in it for ever. There are legally qualfied people in all walks of life.
June 19, 2009
wot like 1/2 our politicians – hardly shining examples
June 19, 2009
Sure you could find lawyers on FTSE boards and elsewhere.
June 22, 2009
Soon the only jobs left will be public sector jobs. The IT sector has been decimated and accounting is following quickly. This is the big “growth” area for the consulting companies, shifting the back office to India/China.
June 22, 2009
There should be no problem where you are looking at commodity type work. I am struggling to think of work more commoditised than capital markets & a lot of corporate work. Where I think this will fall down is quality and culture. Banks now outsource legal work to India but the locals are inflexible & technically ignorant – result? No deals with those banks but will this last? With the potential sums involved a cutture shift is not such a big ask…
July 3, 2009
@ Anonymous 7 – Your comment reeks of insecurity and false notions. When this recession is behind us the balance of the world economy will favour India and China no matter what a few banks or law firms do. If you continue to believe Indian service providers are inflexible and technically ignorant I am afraid you will make yourself redundant intellectually quite soon.
The world hates change, yet it is the only thing that has brought progress – Charles Kettering