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)
FB | 4-Feb-2011 4:12 pm
Hmm, what a perverse world we live in. Labour gets trashed for diverting public spending to poorer parts of the country to create jobs, but when drippingly-rich businesses cream a few badly-needed millions from the public purse to do it, it's good old-fashioned capitalism at work.
I'm not usually one of those "think of how many nurses..." people, and this wouldn't pay for many, but when I read of Citizens' Advice Bureaux, youth clubs and rural transport networks closing down, this kind of thing really makes me wonder about what kind of country we live in.
As Rousseau and Voltaire (love it!) point out, this is subsidising business cost-cutting, not stimulating growth in any meaningful sense.
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Geographic Tick | 4-Feb-2011 4:37 pm
"(Derry for example is the only city (technically) in the UK with no motorway connections)"
Er, St David's? Elgin? Bangor? Ely? Brighton? Armagh? Newry? Norwich? Inverness? Etc. etc.
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howard | 4-Feb-2011 4:41 pm
@Anonymous | 4-Feb-2011 4:07 pm
And just how much of the firm's revenues are managed through "tax-efficient" arrangements? My guess is not an insignificant amount
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IHateBPP | 4-Feb-2011 10:29 pm
I wouldn't be so opposed to these Belfast sausage factories if they were actually offering a realistic career path of any kind. Instead, as many people have pointed out, the salaries are rock bottom and the opportunities to progess are non-existent. These offices are very analogous to a certain blue NI conveyancing factory.
As for spending the salary locally, once taxes, student debt and travel costs are paid there won't be much of that ten grand a year to go around.
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IHateBPP | 4-Feb-2011 10:42 pm
Herbert Smith's recruitment ads proclaimed "invest in yourself", seems like they don't want to follow their own advice.
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Anonymous | 4-Feb-2011 11:00 pm
The management at A&O have sold their soul for a fistful of dollars - what are they going to sell for a few dollars more? I think it's time the fat cats had a heart attack - if this goes on there will be an uprising.
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Anonymous | 5-Feb-2011 1:16 am
So now they have launched the new "brand" and spent thousands promoting it and training London staff in all the ins and outs they're outsourcing to Belfast - nice one. Note to all BS staff - "go the extra mile" -you'll be rewarded with redundancy.
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Anonymous | 5-Feb-2011 12:41 pm
How very sad that a firm such as A&O that once had such high principles when it came to looking after its staff,now sees fit to betray people who have given years of hard work, loyalty and expertise for the sake of adding couple or so thousand to the pockets of those who may not even notice that it's there.
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john | 7-Feb-2011 2:58 am
Money well spent! Much better than funding LSC help for benefits scroungers and so called "disableds".
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A&O Partner | 7-Feb-2011 7:32 am
Oh dear, this is a bit of a mess. Are our PR people on strike? Are we northshoring them as well? Somebody please do something!
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