A&O boss vows to limit job cuts as firm transfers support function to Belfast
Allen & Overy (A&O) managing partner Wim Dejonghe has pledged to limit the number of redundancies that are likely to come about as a result of the firm’s decision to transfer up to 180 support staff to Belfast.
Wim Dejonghe
Dejonghe added that cutting costs was not the main driver behind the move to open up twin support and legal services operations in the Northern Irish capital, despite estimated savings of £10m over the first five years.
“I think it’s unrealistic to think that all people will relocate,” Dejonghe told The Lawyer.
He added: “I hope to limit the number of redundancies as much as possible. Obviously we do offer the opportunity [to relocate] and we’ll incentivise people to do that.”
A consultation process with staff likely to be affected will begin shortly, with details of any relocation packages yet to be worked out.
Dejonghe also defended the decision to move some support functions away from A&O’s London base, despite the projected savings.
“If the costs were the driver then we could’ve done something else, but we never wanted to compromise on quality,” he said. “It’s one of the reasons we went for onshoring not offshoring and why we’re launching as an A&O office. We weren’t going to take any risks with quality.
“There’s a lot of investment involved so the cost saving will only be £10m in total over the first five years.”
As part of the project A&O will initially transfer 180 members of support staff to Belfast to deliver IT, HR, finance, business services and library functions from a single site. The legal services centre will take on some routine or less complex legal work.
As many as 250 support roles could be based in the city by 2014, with total headcount including fee-earners potentially reaching 300.
The decision to open up in Belfast mirrors a move made by Herbert Smith last year when the firm opened a support office to service its dispute resolution practice (24 November 2010).
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Readers' comments (61)
Anonymous | 2-Feb-2011 8:39 pm
Considering most of the staff are from London and wouldn't move to Northern Ireland then it's easy to see what they are doing. Most of the staff will be made redundant and A&O will recruit in NI. Here we see another example of poor American organisational planning. Some of the IT rolls are quite specialised and they will not be able to service A&O lawyers as well. God help the CEO when they loose big clients because their IT goes down or worse is hacked.
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Anonymous | 3-Feb-2011 9:24 am
Baker & McKenzie seem to manage to have a fully-functioning IT function without it breaking down all the time - and their entire back office is in Manilla!
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Anonymous | 3-Feb-2011 10:54 am
Dejonghe says cutting costs is not the main driver for this. So what is his point? That northshoring to Belfast guarantees better quality than offshoring to India? Or is the reality that it is actually cheaper to open in Belfast than start from scratch in India. Plus, if they follow Herbies, salaries will start at a base of £10 an hour. So to say it is not about cost cutting is ridiculous, just be open about it and tell us how you plan to pass any cost savings onto the client.
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Anonymous | 3-Feb-2011 11:10 am
A brilliant idea.....Belfast is a wonderful place (been there on holiday a few times) house prices are cheaper, schools are better and the overall quality of life much better than London......I for one am looking forward to re-locating
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anon | 3-Feb-2011 11:21 am
Sure, clients vigorously want A&O to open up in Belfast. Another obvious redundancy program without having the balls to be honest about it.
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Anonymous | 3-Feb-2011 11:56 am
They've already said that costs will be cut. It's no surprise really - makes business sense. I'd expect more firms to follow suit.
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Dayglo Dave | 3-Feb-2011 12:12 pm
Anonymous@ 10:54 am - Why do cost savings have to be passed on the client? Why can't a firm keep them for themselves? There are plenty of pressures from clients to drive fees down. Firms are perfectly entitled to make costs savings. One could argue that the more profitable a firm is, the better able it is to attract top talent.
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IHateBPP | 3-Feb-2011 12:54 pm
A&O are no doubt well aware that NI lawyers will flock to them despite the inevitably miniscule salary (Herbert Smith are paying less than a cleaner gets) as there's nothing else going except unpaid training contracts, unpaid NQ roles, 10k a year conveyancing paralegal roles or the dole.
@Anonymous | 3-Feb-2011 11:10 am, house prices are, a bit, lower but that's offset by the fact that salaries, especially in the legal sector, are much lower.
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Anonymous | 3-Feb-2011 1:10 pm
How is this not a cost saving exercise? If it's not then what can justify uprouting staff or making them redundant. I would always think that a better service is provided with the support staff functions onsite rather than moving them to a different country. This cycle of change constantly happens and then services are brought back in because it doesn't work.
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Bored of all this crap | 3-Feb-2011 1:19 pm
Cutting costs is not the main driver, MY ASS. A&O always used to be transparent about this sort of thing, but this is a new low. How do they think they can get away with presenting the Belfast office as some wonderful life opportunity for librarians and legal excecs? It's all about the bottom line, stoopid.
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