Addleshaws cuts fee-earners as profits rise 30 per cent
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Addleshaw Goddard is cutting around 24 fee-earners across its offices in a bid to combat low attrition as the firm posts a 30 per cent rise in profit.
Addleshaws said it had begun a redundancy consultation to, “rebalance the mix and skills and experience across each UK office” as attrition among senior fee earners drops.
The firm expects around 24 fee-earners to be made redundant. This amounts to approximately 3.5 per cent of the total number of non-partner fee-earners.
According to Addleshaws over the past five years fee-earner numbers have dropped from 490 to 437 but the firm’s two most senior fee-earner categories (managing associate and legal director) have together increased from 100 to 173.
A firm spokesperson added that there are no similar plans to cut partner or support staff numbers.
The news comes as Addleshaws has posted a 5 per cent rise in turnover for the 2011-12 financial year. Revenue at the firm was £170m, up from £161.9m in 2010-11.
Profit for 2011-12 was up 30 per cent, from £34.4m to £44.9m, while average profit per equity partner (PEP) rose 37 per cent over the same period, from £328,000 to £450,000.
The rises come after a disappointing 2010-11, however, when the firm cut around 40 support staff jobs (24 May 2011).
In that year profit fell 17 per cent, average PEP dropped 23 per cent and revenue fell by just over 3 per cent.
In a statement, Addleshaw Goddard’s managing partner Paul Devitt said: “In common with other businesses, natural attrition in our firm, especially amongst senior fee-earners, has fallen in recent years. We have therefore taken the difficult decision, having so far avoided a fee earner redundancy programme, to rebalance the shape and size of our front-line fee-earner resource by reducing the number of non-partner fee-earners.”
Addleshaws’ 2011-12 revenue by division:
Commercial services: £23.4m
Corporate: £29.2m
Litigation: £37.4m
Finance and projects: £37.3m
Real estate: £35.4m
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Readers' comments (27)
Cynic-Al | 21-Jun-2012 2:52 pm
Marvelous. Thanks very much guys for getting us back up to the expected PEP. We honestly couldn't have done it but for you. Now, if you could just shut the door on your way out and go through the side door this would be appreciated too.
Disgusting treatment of staff. 24 fee earners on salary of circa £80k would take less than 20% of the profit "increase" posted, not the overall profit.
Greed is a horrible thing.
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Anonymous | 21-Jun-2012 4:21 pm
Let's not be too hasty to make judgments on the firm. I'm sure if you spoke to any non-partner of the firm they would tell you it is a wonderful place to work. The constant nervous glances over the shoulder to ensure no-one from the firm was within ear-shot would be mere coincidence...
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Anonymous | 21-Jun-2012 6:01 pm
Do as others would do unto you. Does that have any degree of resonance for the partners who have required sacrifice (not least to ensure their own PEP figures) from these associates on the vague promise of future promotion? Whilst all of us at this rank take such partner chat with enough salt to take us well over a government mandated RDA this is appalling behaviour - and justification - from AG. They must be using the same PR firm as the now defunct McGrigors.
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Anonymous | 21-Jun-2012 6:11 pm
This is appalling. Having beasted the senior staff for years and told them of their value to the business, they are now thrown over whilst the partners pocket even bigger profits.
How can they sleep?
As for the people saying at least they are not sly about it. Not being sly about something reprehensible doesn't make it less reprehensible.
As for the people saying other firms do it, it is equally crap when they do it too.
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Anonymous | 21-Jun-2012 7:40 pm
Is anyone prepared to take this on as Age Discrimination?
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A Nony Mouse | 22-Jun-2012 9:14 am
Paul Devitt: " . . . having so far avoided a fee earner redundancy programme . . ."
Yet fee earner numbers have dropped from 490 to 437 over the last 5 years? And with the market as it's been over that time they've all voluntarily resigned and moved on to pastures new?
I don't think so. There's another name for that programme which hasn't just affected fee earners. At least this time around they're doing the slightly more decent thing by calling it a redundancy process.
Now when are they going to deal with the issue of partners clawing back every bit of work to their own desks rather than going out hunting for new work, leaving those of fee earners empty and at risk of redundancy? Or has fee earner development fallen by the wayside?!
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Gordon Gecko | 22-Jun-2012 9:20 am
Axing associates despite profits having increased?! I'm starting to suspect that AG is being run to turn a profit rather than as a charity to keep unimaginative swats in high paid employment after they leave education.
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Anonymous | 22-Jun-2012 9:30 am
..... its the AG Way
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Anonymous | 22-Jun-2012 11:39 am
If they don't get rid of large numbers of fee-earners and support staff on a regular basis, how on earth will they afford to pay for the last-minute first class train travel by partners between each office?
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Anonymous | 22-Jun-2012 12:02 pm
Would that be the same Addleshaw Goddard which won this very magazine's 2011 HR Award for "Innovation in Talent Management and Retention"? Surely not!
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