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.”
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Readers' comments (27)
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.
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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.
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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.
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Anonymous | 23-Mar-2012 2:56 pm
What's the big deal, other than it's surpising that the downsizing is not much bigger?
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Zebra Crossing | 23-Mar-2012 3:03 pm
I am surprised that 'Christina Bryan' is not on here, vociferously justifying CC's actions!
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Anonymous | 23-Mar-2012 3:26 pm
Problems if you get larger and larger and keep taking on more and more low margin work!
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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.
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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.
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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.
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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.
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