Cobbetts to make forty fee-earners redundant
6 October 2008
The announcement that 40 fee-earning jobs are to go at Cobbetts, though, is proportionally much more significant than at Wragges or Eversheds.
Forty job losses account for at least 11 per cent of the total fee-earner headcount at the firm, compared with under 5 per cent at Wragges and less than 2 per cent at Eversheds.
But such a large slice of the total fee-earning capacity is in fact largely in line with the trend of staff contraction at Cobbetts.
Last year the firm lost 83 fee-earners, or 18 per cent of that group. It now has a third fewer partners than it did two years ago, while the total number of equity partners has also shrunk by 20 lawyers, or 4 per cent of the total partnership.
In part, the dwindling numbers over the past year can be accounted for by major team exits. Sources at the firm have privately said that last year’s decision to raise the partnership bar was intended to encourage some lawyers to leave as a method of raising profitability. But that may be a way of putting a brave face on a scenario that has inevitably left the firm without some of its higher-billing groups.
Cobbetts’ loss of a highly regarded social housing team from its Birmingham office was Shoosmiths’ ;gain. ;Six months after the four-partner, 31-member group joined, it has added 20 per cent to the turnover of Shoosmiths’ Birmingham office.
The situation at Cobbetts’ Birmingham ;office, meanwhile, is a far cry from the victory speeches that followed the firm’s acquisition of Lee Crowder in 2004. At the time the management spoke of increasing total headcount from 150 to 350 within 18 months, according to one former partner.
“The perspective was that you’re in a shiny new office and the work is automatically going to flow in,” the partner added.
Five years later the office has fewer staff than when it first opened. Former lawyers have talked of the lack of a cultural fit between the two firms. Having taken on offices at centrally located One Colmore Square, on what is understood to be a rent of around £25 per sq ft (at the top end of Birmingham rents), Cobbetts has now let out one floor of its office space to Anglo Irish Bank.
In ;Manchester, ;the departure in May of a property finance team led by partner George MacMillan for Cobbetts’ arch-rival Halliwells will have been more of a personal blow than a financial one.
Managing ;partner Michael Shaw had a pivotal role in the setting up of the property finance client base, which he handed over to MacMillan. There were a lot of hurt feelings when the partner moved on.
However, MacMillan would not comment on what impact his practice has had in the past five months since he joined. This is not surprising given that his new firm is in the midst of its own redundancy consultation, specifically targeting 40 employees in the property department.
Despite a reliance on property, Cobbetts still has its strengths. It boasts one of the top 20 AIM practices in the country and, while there are not many AIM deals being done at the moment, the firm was recently ranked alongside Eversheds when it comes to advising on private equity deals in the £5m-£15m range. It also has a sizeable litigation department and undertakes some debt collection work.