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Allen & Overy (A&O) global managing partner Wim Dejonghe has defended his firm’s decision to relocate around 180 support roles from London to Belfast despite the redundancies this will entail.
In an interview with The Lawyer Dejonghe admitted that, when he broke the news to his staff that their jobs could be on the line, it was “a difficult day”.
He said: “We’re a business, and any business has to deal with redundancies. Where you can stand out as an employer of choice is the way you deal with that. I made a choice to deliver that message personally.
“We’ll treat people as fairly as is possible. We understand it was a difficult message for our people. [The day the announcement was made] was a difficult day.”
Under the scheme A&O will launch an office in the Northern Irish capital by autumn this year to service the magic circle firm’s global support needs, including services across IT, HR, finance, business services and library.
Around 180 support roles are due to move to Belfast, with total support roles based there rising to 250 by 2014. The move is not likely to include client-facing roles, which will remain in London.
In addition, some 50 fee-earning roles will be created in Belfast, with no lawyers made redundant in London as a result.
Although Dejonghe has argued that the Belfast launch is not motivated by the desire to cut costs, the budgeted saving after relocation, set-up and redundancy expenditure is expected to be £10m in the first five years.
As reported on The Lawyer.com (4 February), regional development agency Invest Northern Ireland is to give A&O £2.5m to relocate. Each member of staff is expected to be given around £8,000 to encourage them to relocate.
It was recently revealed by legal website RollonFriday that staff at Herbert Smith’s Belfast operation, due to open in April 2011, could be paid as little as £10 per hour.
While A&O has not provided details on either the relocation packages or the remuneration packages it proposes to pay to staff, those who move will be paid less than they would be for carrying out equivalent roles in London.
Dejonghe told The Lawyer: “Packages are obviously determined by local conditions and they’ll be competitive in the local market. We hope that as many people as possible will move.”
That said, Dejonghe agreed that, as it is not certain everyone will be attracted by the idea of upping sticks to Northern Ireland for less pay, the firm’s needs could be met by the local employment market if necessary.
This is not the first time A&O has carried out support and less complex legal functions in lower-cost bases. It was the first magic circle firm to outsource legal work, with operations in the US and India.
Dejonghe said these ”haphazard arrangements” were likely to dwindle as a result of the firm’s new own-brand venture. He added: “This is about offering an additional option to our partners. We expect volumes [in offshore and outsourced legal work] to go down.”