A&O and Herbies share £3m of public funding for Belfast launches
Allen & Overy (A&O) and Herbert Smith will together receive almost £3m of taxpayers’ money to help fund their operations in Northern Ireland.
Belfast
Regional development agency Invest Northern Ireland (NI) will give A&O, which turned over £1.05bn last year, £2.5m to launch its support services centre, while £450m turnover Herbert Smith will receive £208,000 to open its due diligence office.
The sums are calculated specifically in relation to the number of jobs that are expected to be based in Northern Ireland as a result of the launches.
A&O aims to have 300 employees in Belfast by 2014, with the number including around 50 newly created fee-earning jobs and 250 support roles that will be relocated. On this basis each role is allocated around £8,000 in funding.
A spokesperson for the firm told The Lawyer that the firm would “propose to pass on the funding on a per person basis”, but given that global managing partner Wim Dejonghe has admitted that it is “unrealistic” that all London-based support staff concerned will want to relocate to Belfast, that “anything left over will be used to cover set-up costs”.
Herbert Smith is to open a local office in April to focus primarily on reviewing and analysing documentation relating to cases the firm is acting on. The office will employ 26 fee-earners. The firm has said there will not be any redundancies as a result. Each new role is allocated around £10,000 by Invest NI.
The financial backing comes as the Northern Ireland Office anticipates a cumulative 25 per cent real terms reduction in its resource budges and a 33 per cent reduction in its administration budget.
But a spokesperson at A&O said: “If they end up with 300 people receiving a salary in Belfast, renting or buying property, those salaries get spent locally, you have all those support services to the offices, then its good for the local economy.
“This is the normal course of business, governments around the world set up these agencies with a specific aim of attracting business. In the 20 locations we looked at around the world it was quite standard.”
A spokesperson at Invest NI said that in both cases the funding is “an offer of grant assistance which is only paid as the [firm] meets the targets and strict terms and conditions set out in their individual letter of offer”.
A&O considered locations in central and eastern Europe, Asia, the Middle East and Africa, including the cities of Budapest and Cairo, before opting for Belfast.
A spokesperson at Herbert Smith said that the money was “towards the creation of the 26 jobs”.
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Readers' comments (37)
Hamish | 4-Feb-2011 1:10 pm
Cairo? Lucky escape there ay?
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Retirement ahoy!! | 4-Feb-2011 1:23 pm
Great to see our taxes being so well spent!!
Pass the champers Rodders!!
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anon | 4-Feb-2011 1:28 pm
I am shocked and ashamed by this. There was a time when you could take pride in being a member of a magic or silver circle firm. These days are clearly over. Greedy scum of the earth
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Anonymous | 4-Feb-2011 1:31 pm
Wonderful, not only do these firms get away with the PR spin that they are only 'relocating people' when in reality it means London staff are going to lose their jobs - these firms are getting Government funding - part of our taxes - to sack these people.
This means, via the Government, we are paying A&O and Herbies lawyers to sack employees, who we will now have to pay benefits for as well, as there are no jobs out there.
Even better, the firms say this is nothing about cost-saving. Wow, and I thought the Halliwells scandal was bad public relations. This makes Ian Austin look like a Saint. Keep it up Wim.
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Bobby Smith | 4-Feb-2011 2:03 pm
Great! We, the taxpayers of the UK, have just handed
£13 500 to EACH London based partner of Allen & Overy in order to make their business more 'efficient' and thus more capable of making additional profits that will be paid to the PARTNERS OF ALLEN & OVERY. I know the bankers have taken most of the flack of late but for every dodgy deal done there is ALWAYS a lawyer in the background making the docs look good. Time for the partners at Allen & Overy to make a LARGE charitable contribution me thinks?
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Anonymous | 4-Feb-2011 2:04 pm
Not quite sure what to think of this, a little too messy if you ask me.
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Anonymous | 4-Feb-2011 2:29 pm
Sounds to me like Invest NI is gambling a bit on A&O not managing to persuade its staff to move - how many jobs will really be filled by Northern Irish people and how many by Londoners moving?
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Fat Catz | 4-Feb-2011 2:30 pm
First Vodafone doesn't avoids billions in taxes, and now A&O takes a handout from the government to move jobs from London to Belfast. There is something rotten in the City when a rich firm trousers yet more cash to make its London workers redundant. But it's all ok, 'cause we all live in a global economy, right?
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Anonymous | 4-Feb-2011 2:35 pm
Its so easy to jump on the band wagon and cry 'tax payers' money!! But, Northern Ireland is country which went through considerable rejuvenation during the Nighties boom years and an area which will be hit hard by the cuts imposed on us by this government.
Such initiatives by regional development agencies are intended to keep jobs in the region, help it to thrive and stop it from slipping into the depths of recession, stop the brain drain and help the region to flourish.
If my RDA in the South West made some efforts to attract decent employers like these firms I think it would help keep young people in the region by offering them opportunities to progress in areas outside the usual low paid trade of tourism.
So its £3m and the firms could afford it themselves, so what? This is an investment in the future of the country, one that could have been made by the firm without this incentive but one which probably would never have been made without it.
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Belfast exile | 4-Feb-2011 2:49 pm
To Anonymous | 4-Feb-2011 2:35 pm:
Sorry but I don't like my taxes being used to prop up regions which don't manage to generate business on their own.
Successive governments have been trucking other people's money into Northern Ireland for generations and it hasn't made a jot of difference.
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