Assistants suffer the brunt of law firm redundancies
1 December 2002
6 March 2014
16 December 2013
3 March 2014
6 October 2014
26 June 2014
IT IS tough being a commercial lawyer in current market conditions. As the economic slump continues to eat its way through the legal profession, assistant solicitors are being elbowed out by firms desperate to save cash.
The first round of assistant lay-offs started soon after the dotcom bubble burst. Leading US technology firms Cooley Godward and Brobeck Phleger & Harrison were among the first firms in California to sack assistants, while New York firms Dewey Ballantine and Shearman & Sterling quickly followed suit.
The trend for assistant culling soon reached these shores, with big-name firms such as Hammonds , Stephenson Harwood, Osborne Clarke, Berwin Leighton Paisner (BLP) and Dechert all raising the axe against their assistants. This disturbing trend has also prevailed at magic circle firm Linklaters, although rumours abound as to the extent of the cuts. Then, of course, there was the spectacular collapse of accountancy-tied firm Garretts as a result of the Enron scandal, which led to both trainees and assistants losing their jobs.
Corporate and technology have been hardest hit by the slowdown. Meanwhile, M&A, the bread and butter of almost every corporate department, has significantly petered out. Even the technology deals that kept lawyers busy and brought in plenty of fee income during the dotcom boom are nowhere to be seen. It is, therefore, no surprise that law firms are tightening their belts.
Although cutbacks are being blamed on the health of the global economy, assistant lay-offs can also occur when two firms join forces. For example, BLP made redundancies following its merger with New York-based Kramer Levin Naftalis & Frankel, as did Titmuss Sainer Dechert after its merger with Dechert Price & Rhoads. The firms deny that consolidation forced them to slash assistant solicitor numbers, but Sue Ashtiany, head of employment at commercial firm Nabarro Nathanson, said a merger will invariably lead to a review of resources, which could result in cutbacks in relation to staff numbers.
Most firms have tried to adopt a transparent process when handling assistant layoffs. Brobeck Hale and Dorr, the UK joint venture between Brobeck Phleger & Harrison and US firm Hale & Dorr went even further and formed an assistant committee to consider the firms proposals to cut assistant salaries by 15 per cent over a six-month period. Eventually, the committee decided to ditch the pay cuts in favour of a voluntary redundancy scheme that saw five associates leave the firm.
Other firms have been more secretive, both internally and externally, much to the anger of assistants.
One assistant solicitor who was recently asked to leave a large commercial law firm said: I understand why law firms are asking staff to leave, but the secrecy surrounding redundancy programmes angers me. Law firms should put assistants wellbeing first by telling them from the outset if their position is at risk.
The compensation packages offered to assistants are varied. Some assistants have received three months gross pay instead of working their notice period, while others have received an additional three months gross pay. It is commonly believed that firms are offering extra money to keep the assistants sweet and to make sure they are not sued for unfair dismissal.
Ashtiany said that the payments are not megabucks. She added: Even though the amount of money assistants have been offered is reasonable, it is not much more than what they would be legally entitled to.
Under English law, an employee can expect to receive one weeks pay, capped at 250, for every full year of service. This amount is on top of the money owed to them in relation to their statutory notice period, which in the case of most assistants, is three months. On this basis, a two year-qualified assistant who also trained at his or her firm is entitled to receive 1,000 plus three months gross pay. Up to one months salary may also be paid as a substitute for the consultation and bargaining process that companies usually have to go through when making redundancies.
Ashtiany, whose team has advised a number assistants who have been made redundant, discourages most clients, particularly the more junior ones, from suing their former employers. She said: Its not worth taking a firm to an employment tribunal because the chance of success in current market conditions is very low. The damages an assistant is likely to be awarded will, at best, not be much more than the amounts they are being offered, especially after costs are deducted.
Taking an ex-employer to tribunal in these circumstances is not exactly a career enhancing move, she added.
Being made redundant is a severe blow for anyone to suffer. But it is important to remain calm and to carefully consider all the options. It might be a perfect time to look at other opportunities outside of law. Alternatively, assistants may decide to take a gap year and ride out the recession. In any case, Ashtiany recommends that assistants do something constructive that will complement their long term career ambitions, such as learning a new language.
If assistants decide to look for a new job, Joanne Street, a business manager in the private practice division of legal recruitment consultants Hays ZMB, believes that flexibility is very important from day one.
She said: We meet a lot of assistants who are not initially willing to consider all opportunities and are quite set in their ideas as to the type of firm they want to work in. Its important to note that this is not necessarily their last move and when things pick up as long as they continue getting good experience they can always move back into a more ideal position. Assistants should consider relocating and look at opportunities in the public and notfor-profit sectors as they are generally insulated from changes in the economy.
Street also advises assistants to avoid the scatter-gun approach when applying for a new job. She said: Candidates should ensure that the process is within their control and avoid sending their CVs to every firm that has a vacancy. Its also better to use only a few reputable consultants, as this reduces the risk of CVs being sent to the same firm twice, which can make an assistant look disorganised.
It is difficult to predict how long the current conditions will last and there is a real possibility that further lay-offs will happen. But Ashtiany is optimistic that the current recession will end soon. After all, these firms have invested vast quantities of money in these individuals, so shouldnt they make a genuine effort to hold onto good staff?