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Addleshaw Goddard has begun a redundancy consultation among its support staff at the end of a financial year that saw net profit drop by 17 per cent.
The news comes as the firm introduces a host of structural and strategic changes, including the launch of offices in Singapore and Dubai. The offices, which are slated to open later this year, will focus on international arbitration.
According to the firm as many as 40 staff members could see their jobs made redundant as part of the 30-day consultation. All those at risk are in the firm’s business services teams, which comprise HR, business development, IT, facilities, knowledge and learning and risk. No redundancies are envisioned for fee-earners, according to the firm.
The firm is also consulting with the 114 members of its defined benefit (DB) pension schemes about closing the funds to further accruals. The schemes have been closed to new entrants for some time, with anyone who is not a member of the final salary pension given the option to save via a defined contribution (DC) scheme.
Under the terms of the consultation, the firm proposes that everyone in the DB scheme should transfer their pension pots to the DC scheme.
The redundancies come as Addleshaw’s net profit fell 17 per cent from £41.3m in 2009-10 to £34.4m.
Addleshaws is also set to transfer most of its non-partner services and costs into a new service company, which will be a wholly owned subsidiary of the LLP, in a bid to become more tax efficient in light of the 50 per cent higher rate of income tax.
In a statement managing partner Paul Devitt said: “We need to make changes and improvements to take best advantage of the new environment we now operate in - one of opportunity and increased busyness and yet one where there’s a need for greater efficiency and to deliver differently and better for our clients. Even allowing for current economic and market pressures, the returns we generated from the business last year were disappointing and we have a very clear strategy and vision to drive better performance this year and in future years.
“We need to reduce our costs, but the focus is not simply about cost cutting. Our business remains in a strong position and we continue to plan and invest appropriately for the future. We’re confident that the full range of measures being proposed, and decisions taken around the tactics, focus and implementation of our strategy will enhance the long-term strength and competitiveness of our business.”
As reported in The Lawyer yesterday, the firm has also merged its governance board and executive leadership team to create a unitary board, and reduced the number of partners in management roles (23 May 2011).