A&O finalises details of redundancy packages
Allen & Overy (A&O) has finished consulting on the packages it will be paying to associates who are made redundant, with everyone expected to work at the firm until the end of May to receive the full payout.
According to the firm the pay-outs have been structured to be as tax-efficient as possible, with an associate with one-year's post qualification experience (PQE) set to receive up to £33,000.
The package is conditional on associates working until the end of May, for which they will be paid. They will also receive two months' pay in lieu of notice, a minimum of three-and-a-half weeks' pay for each full year of service with the firm plus a discretionary lump sum ranging from £4,000 to £12,000.
A spokesperson said: "The discussions have been robust, but most importantly open and honest. We'd like to thank the staff representatives for both the effort they have put into the process on behalf of their colleagues and the professional manner in which the discussions have been conducted."
A three-year PQE associate on a salary of £84,000 would receive: £7,000 for one months' paid notice, £14,000 for two months in lieu of notice, £5,650 if he or she has been at A&O for one year or less and the same amount for every full additional year.
Including the three-year PQE lump sum payment of around £6,000, this would result in a total payoff of around £32,650. If that three-year PQE associate had been a trainee with the firm, the time element would increase this amount to around £55,250.
The firm will also pay previously earned associate bonuses as a structured redundancy payment and will continue to pay pension contributions during the two months' paid in lieu of notice.
The spokesperson said: "From the outset we've said that we've taken the difficult decision to act now from a position of strength, so that we can offer better terms to our departing people than might otherwise be the case. We believe this is reflected in the terms that we're offering.
"We now move to the remaining tasks of completing the redundancy process and helping all our people through what has been, and continues to be, a difficult time."
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Readers' comments (20)
A&O Associate | 16-Mar-2009 4:15 pm
Bra&o!
The announcement of the redundancy packages marks a culmination of a process which has at all times sought to treat employees with dignity and respect. Having dedicated employee representatives chosen by the employees themselves has acheived a great deal of transparency and has ensured that employees have been allowed to ask questions at every stage. The criteria selected for redundancy are fair and objective and recognise the reality facing the firm, i.e. a decrease in busyness at a time when associate attrition rates have dropped from 20% to practically zero. The redundancy package is generous compared to any peer firms and recognises employees' commitment to the firm, through enhanced years-of-service payments, as well as honouring bonuses already accrued. Although I find myself in the firing line, I feel that whatever the outcome, the process has been fair and reasonable (unlike the majority of firms that I have read about or heard about from friends). The whole process will inevitably cause graduates to use additional scrutiny when selecting their firms, but they should take some comfort from knowing that A&O has not allowed its reputation as "the pick of the magic circle" to be tarnished by this very painful (but sadly inevitable process).
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A real A&O associate | 16-Mar-2009 5:12 pm
Is this for real?
I can't help but think that the comment from "A&O Associate" was written by the A&O PR department. One thing is for sure- those of us in the A&O offices outside of London did not have the benefit of an open, transparent process, and the redundancy packages on offer appear to be far less generous than those mentioned in the article.
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Dave | 16-Mar-2009 5:16 pm
Impressed
I have never worked for A & O but cannot help but be impressed by the way they have handled this, in marked contrast to those miserable tightwads who were grabbing the headlines last week. People don't forget these things quickly. A & O have a record of handling tricky situations with common sense and intelligence.
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A&O Associate | 16-Mar-2009 5:26 pm
In response...
"A real A&O associate" obviously has not had much contact with the A&O PR department if he/she thinks that they would be capable of drafting a comment as coherent as mine. I cannot speak to the processes in the A&O offices outside of London (which are a law unto themselves), but I am yet to hear of another firm in London that has handled the redundancy process as adeptly as A&O. I would love to hear of one (and will be sure to send my CV to them if and when I get my P45).
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Matt Connacher | 16-Mar-2009 5:34 pm
A&O
Will this be the turning point for A&O? Or another hump in the road?
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Anon | 16-Mar-2009 5:48 pm
Singing the Co. Tune
A&O Asociate's - don't be downhearted - maybe HR will give you a job
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A&O associate 2 | 16-Mar-2009 6:01 pm
Badly handled in Europe
Sounds like London has been handled well, but I agree with "A real A&O associate" - I work on the continent and the process has been opaque, with no communication from management since redundancies were first announced (and usual office updates mysteriously ceasing), vague rumours of who is and who isn't leaving, and suggestions that half those who are going have already commenced legal action. In the absence of any facts from management, we don't know what to believe.
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Anonymous | 16-Mar-2009 6:41 pm
Nightmare in Europe
Being an affected non-London based A&O lawyer, I cannot help finding some of the comments (and the article itself) painful and almost cynical to read. The way management and HR handled the process in my jurisdiction was most disgraceful, humiliating and incompetent in every bizarre detail. It will leave scorched earth for years to come, with A&O anyway being at best a third tier player in my jurisdiction. A lot of my friends who are not affected will keep calm during this miserable 2009, but will change ship immediately when the market comes back. The same applies - believe it or not - to some quality partners. The whole process will cost A&O much more in the future. Leading law firms will clearly celebrate - if they could be bothered to look behind.
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Anonymous | 16-Mar-2009 6:45 pm
A&O packages and generosity
"A real A&O associate"? What a joke.
You're right I can't believe how great and fair A&O were. Which part was the fairest: Paying what I am guessing is the minimum contractual notice and making everyone work 2 months of it unlike any other firms? That should be a great working environment, maybe HR should propose a drinks night with discounted prices to boost moral. Or is it the 'tax efficiently' as possible? As only the redundancy component is tax free if you have been there 18 months, essentialy they have generously 'giving' you 31/2 weeks (tax free) plus if they like you they might throw you a few thousand quid but you get to 'work' and pay taxes on the rest. God bless them.
"The pick of the magic circle firms" - hilarious! Thank you for the 31/2 weeks and being so much better than any other firms. I should be able to hold off foreclosure for at least a month now.
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Anonymous | 16-Mar-2009 10:35 pm
Future MC Trainee
I completed a vacation scheme with A&O, and ultimately did not choose them to train with (it was a tough call). I just think how they've handled all of this has really shown that the firm adheres to its values in good times and bad. To compare the decent, sympathetic and professional approach of the spokeswoman with the attitude adopted by Linklaters (redundancy=a fun Harvard MBA crap rebranding exercise) makes me think that I've chose the wrong firm. And I don't think I'm alone.
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