Addleshaw Goddard cuts 24 fee-earner roles at end of consultation
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Addleshaw Goddard has axed 24 fee-earner positions following its second round of redundancies in just over a year.
Paul Devitt
Managing partner Paul Devitt announced today that the roles have been cut in a bid to “rebalance” the firm’s front-line fee-earner resource.
The jobs have gone from across each of the firm’s UK offices in London, Leeds and Manchester. The redundancies do not affect the firm’s newly opened Singapore office.
The redundancies follow the admission in June that natural attrition rates had fallen among senior fee-earners (21 June 2012). In the five years to 30 April 2012, overall fee-earner numbers reduced from 490 to 437, but the two most senior fee-earner categories – managing associate and legal director – grew from 100 to 173.
In a statement, Devitt said: “We took the difficult decision, having previously avoided a fee-earner redundancy programme, to rebalance the shape and size of our front-line fee-earner resource to ensure that it’s a better fit for our business and more appropriately supports our long-term strength and competitiveness.
“It has, of course, been a difficult period for those affected by the consultation and we thank them for their understanding and great professionalism. We wish them well.”
The firm announced the redundancy programme at the same time as a 30 per cent rise in profits, from £34.4m in 2010-11 to £44.9m for 2011-12. Turnover was also up by five per cent, from £161.9m to £170m.
It is not thought that there are any similar plans to cut partner or support staff numbers after May 2011 redundancy talks ended in 40 jobs being cut from the firm’s business services teams. That was in response to a difficult 12 months, with a 17 per cent slump in net profit (24 May 2011).
As part of an ongoing streamlining of the firm’s management, Addleshaw Goddard has also slashed the number of hurdles that lawyers have to navigate to be promoted to the partnership (30 July 2012).
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Readers' comments (17)
Anon | 30-Aug-2012 1:12 pm
Some of the comments above are truly pathetic. Firstly, it is very clear that this firm has not been open and that far more lawyers have left it by stealth over recent years than through formal redundancy processes.
Of course it is by no means alone in that regard, but so what, this is an article on a specific firm.
Secondly, it is truly bizarre that it has been stated that large scale redundancies like this are not news. What the author means is "I don't care about those losing their jobs".
This economy is in BIG, BIG trouble. Not just facing a vast private and public sector debt burden, a massive asset bubble, and a large and persistent trade deficit, but also a rapid fall in competitiveness compared to fast rising nations in the east.
Law firms like this, which by the standards of the wider economy enjoy super normal profits, and which do not directly face foreign competition, making large redundancies purely to maintain (or even raise) their super normal profits at this time is damaging to the wider economy. All it does is increase unemployment, increase job insecurity, increase the burden on the state.
SHAME on this firm.
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Anonymous | 30-Aug-2012 2:22 pm
I dont understand why you all are complaining about businesses reducing their headcount. It is the nature of our global economic system to have ever growing revenues, profits and cash in what is a finite space/environment on our planet. it is not the law firms that are the bad boys or any other employers for that matter, it is our economic system which is dated and needs to be renewed. all of the arguments presented in these comments are flawed as they merely touch the surface of whats wrong in our economy.
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Anonymous | 30-Aug-2012 6:46 pm
Really Anon @ 2:22? The economy may have it's problems. But like it or not, some people consider the current LLP law firm model to be flawed. It would be like turkey's voting for Christmas to expect a partner to acknowledge that a team has become top heavy with partners. So instead, when the levels of work reduce, the senior fee earners are dropped. That's not to say that this strategy represents either best value or quality of service for their clients, simply that the partners ensure that they stay put.
Some may also say that chasing improving profitability in the current economic climate says more about what is wrong with our society and the attitude of the senior people in this profession rather than the economy itself. If some of the law firms were being run as companies where the senior fee earners (the partners) are not owners of the business, the profile of the redundancies would be significantly different. That's what non-partners find galling. But then it's all part of the perception that junior fee earnrs have that, having made it, most partners have no regard for managing the aspirations of those that follow them.
It's grown into a sector where too many people in each business want too large a slice of the pie the business makes.
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Anonymous | 30-Aug-2012 9:35 pm
What grates here is the fact that two/three years ago, when times were worse, fee earners at AG agreed to work a four day week, for the good of the firm. Yet now, at a time when AG's profit and PEP both increase, it decides to cull many senior non-partners who have no doubt done much to contribute to those improved figures. What's the point of being loyal if this is how your firm treats you?
Good luck to AG and their ilk. It's only a matter of time, if that point hasn't already been reached, before sensible clients realise that mid-market law firms (or to quote their rmarketing patter - "full service" law firms) decide they need specailist lawyers and not "we can do that because we're a big firm" generalists. Those days are gone. The Magic Circle and boutiques will thrive. The generalists will wither. Bye bye.
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Legal eagle | 31-Aug-2012 11:21 am
Anonymous | 30-Aug-2012 2:22 pm
Catch yourself on. Your "I don't care" attitude suggests you're someone who has either managed to keep their job (for now, good luck) so you think you're immune, or you are a partner somewhere doing the firing.
AG recorded significant profit uplift last year, so are clearly not struggling to maintain profitability with that cost base. All they are looking to do is add on additional super-earnings next year by cutting people who clearly aren't unnecessary overheads - they will presumably have aided the increased earnings through billable hours at higher (more senior) charge out rates.
If profits had dipped there would almost be an excuse for adjusting the cost base, but to do it on the back of increased profits is just a touch greedy.
And no, I am not an ex-AG employee or someone who has been made redundant.
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Dre | 31-Aug-2012 4:32 pm
@ 30 Aug 9:25pm re 4-day week. Was that out of loyalty or fear that if they didn’t agree, they might be one of those made redundant and struggle to get a comparable job?
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Scep Tickovich | 3-Sep-2012 7:54 am
Well, at least we know now how AG funded their Berezovsky case. Win and it's tickety-boo; lose and it's sack a load of organ donors. Terrific.
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