Clifford Chance to cut City associates in response to 'low NQ attrition'
Clifford Chance is set to axe a string of associates in London, in the latest sign that top-level firms are feeling the pinch from the economic downturn.
David Bickerton
The firm is in consultation with 13 City lawyers in the capital markets and finance practices, with the full number at risk of redundancy.
The firm said the proposed redundancies reflect a drop in the firm’s attrition rate, with the latest cohort of trainees and newly qualified lawyers set to join imminently.
London managing partner David Bickerton said in a statement: “We’re proposing to make a small number of lawyers redundant in London. Our business is very strong and resilient and we continue to grow.
“However, our attrition has fallen significantly and we have a programme of trainees and new qualifiers coming through.
“It’s important to ensure that our resources are in line with the business needs. We’ve not taken this decision lightly.
“We anticipate a maximum of 13 redundancies out of a total of nearly 1,000 fee -earners in London and we have no plans for any more.”
The associates affected have been informed and are currently in talks with management.
The cull is limited to London and is significantly smaller than the 2009 round, in which 80 associates were axed (8 January 2009).
The magic circle firm has, however, already vowed not to restructure its partnership following rival Linklaters’ move to axe a large proportion of its equity partners (9 December 2011).
Linklaters has already axed tens of partners in London (8 December 2011), while Allen & Overy has admitted to cutting between 1 and 3 per cent of its equity partners (28 November 2011).
Linklaters, meanwhile, has confirmed cuts in its London support-staff team, with a spokesperson commenting: “We can confirm that, reluctantly, there have been a small number of headcount reductions in business services in the UK.”
View results 10 per page | 20 per page | 50 per page
Readers' comments (27)
Anonymous | 23-Mar-2012 10:16 am
sounds like a bit of a car crash
Unsuitable or offensive? Report this comment
Anonymous | 23-Mar-2012 10:24 am
Can't think of any other industry in which it would be readily accepted that a desire to offer a permanent role to someone ending a 2 year fixed-term contract would be used to justify terminating existing employees.
Unsuitable or offensive? Report this comment
Anonymous | 23-Mar-2012 10:53 am
Those for whom way is being made have a few years until they're recycled/pushed aside for cheaper labour. Start honing those transferable skills now so that you're fully prepared for the tap on the shoulder when (not if) it comes.
Unsuitable or offensive? Report this comment
Anonymous | 23-Mar-2012 10:58 am
Pardon? When we recruited people we expected them to be poached but they weren't so we'll sack them? This simply reflects a lack of work. There's no need to confuse the issue.
Unsuitable or offensive? Report this comment
Vercingetorix | 23-Mar-2012 11:23 am
CC has vowed not to sack partners only because its partnership deed doesn't allow it too. Links' and A&O's deeds do allow it. So Links and A&O can do it without a vote but CC would need a vote. And the turkeys are not going to vote for Xmas.
If CC's management had the power then they'd be doing exactly what Links did.
Unsuitable or offensive? Report this comment
Barry Gribble | 23-Mar-2012 11:23 am
is this the first spray of a lot more blood that will be spilt on the corporate carpets of london's city firms?
Unsuitable or offensive? Report this comment
James Hill | 23-Mar-2012 11:29 am
Advice to the NQs. Drive drunk in Hong Kong and you will be just fine. If you have a problem just call Mr Charlton.
Unsuitable or offensive? Report this comment
Anonymous | 23-Mar-2012 11:38 am
If there's no work then why the retention of NQs? They say it's important that 'resources' are in line with business need. That smacks of the need for less experienced/cheaper people to do what work there is, rather than there being a lack of work full stop.
Unsuitable or offensive? Report this comment
anon | 23-Mar-2012 12:14 pm
The sheer hypocrisy is startling. CC demands team working skills and a desire to work in a collegial environment from its applicants and then it fires a bunch of associates because cheaper labour is available...
A disgusting decision. Shameful and abhorrent.
Unsuitable or offensive? Report this comment
Anonymous | 23-Mar-2012 12:38 pm
@Vercingetorix: I believe CC partners DID vote on the last restructuring and more partners voted 'yes' than stayed. In other words, some turkeys did indeed vote for Christmas.
Unsuitable or offensive? Report this comment
Anon | 23-Mar-2012 12:47 pm
As always, you need to take the official figure and roughly triple it to take into account all of the "stealth" departures.
The partners had to do something to celebrate the reduction in the 50p tax rate, this is their present to themselves.
Unsuitable or offensive? Report this comment
Anonymous | 23-Mar-2012 2:47 pm
Many partner did indeed vote - with their feet to greener pastures. Think CCs many top funds, PE and corp partners who move to more elite firms.
Unsuitable or offensive? Report this comment
Anonymous | 23-Mar-2012 2:54 pm
We all have to go with the times but getting rid of experiance is not always the best way forward to compare it to new cheaper lawyers who just qualified is not a way forward, but who are we to judge what a firm need to do to move forward throught these ruff times.
Unsuitable or offensive? Report this comment
Anonymous | 23-Mar-2012 2:56 pm
What's the big deal, other than it's surpising that the downsizing is not much bigger?
Unsuitable or offensive? Report this comment
Zebra Crossing | 23-Mar-2012 3:03 pm
I am surprised that 'Christina Bryan' is not on here, vociferously justifying CC's actions!
Unsuitable or offensive? Report this comment
Anonymous | 23-Mar-2012 3:26 pm
Problems if you get larger and larger and keep taking on more and more low margin work!
Unsuitable or offensive? Report this comment
Anonymous | 23-Mar-2012 4:26 pm
This is surely Stage 2 of the 'Newcastle model'.
After deciding to stop promoting associates, the partners replace them with more compliant, less expensive underlinings.
This ensures the partners who arrived in the 2000s are guaranteed to remain in post for another twenty years as their competition is pushed outside the profession.
Unsuitable or offensive? Report this comment
Anonymous | 23-Mar-2012 7:18 pm
This is absolutely normal in a large firm. The way the work allocation is done is that there needs to be a certain number of people at each level, and a 20% per year attrition. If people aren't leaving then they're paying extra for people higher up the lockstep to do jobs, when the work can be done by NQs who get paid 61k a year.
Unsuitable or offensive? Report this comment
Anonymous | 23-Mar-2012 8:06 pm
I agree that this does appear like stage 2 of 'the Newcastle Model'. However the firm which pioneered stage 1 of 'the Newcastle Model' is certainly not being hampered by a "low NQ attrition"!
Like making the partners untouchable in a recession, this policy will kill the firm slowly. Standards will slip and those who suffer from this selfish, greedy scheme will make their feelings known within the profession and to clients. It takes a long time to repair a reputation.
Unsuitable or offensive? Report this comment
Anonymous | 24-Mar-2012 12:31 pm
In response to Anoynmous@10.24:
Can't think of any other industry in which it would be readily accepted that a desire to offer a permanent role to someone ending a 2 year fixed-term contract would be used to justify terminating existing employees.
- I can't think of any other industry where said permanent employees would have an automatic entitlement to 10-20% pay rises year-on-year; where associates are charged out on a similar fee base (indeed, that fee base moves on a 6-month basis at some firms).
Associates can't have it both ways: if you want lockstep salaries, guess what... you need attrition to keep the pyramid in check. The broader problem, however, is the utter evisceration of CC's strategy - like that other British brand (Tesco), the market has shifted and it needs to urgently redefine itself. 13 redundancies won't make a dent.
Unsuitable or offensive? Report this comment