Costs in translation

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  • To say that every firm has lost headcount is just not correct. Plexus has seen double digit growth this year from what I understand. In fact, rumour has it that they have struggled with space and are soon to take about 20%+ more space in their Leeds office alone. Clearly a firm on the up (and I am not Plexus' marketing Dept before anyone starts on me!). No trainees being deferred and no redundancies either from what I can tell. It may not be glamour all the way but what they do clearly works. I'm a bit jealous really.

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  • If Pinsent’s can take out £19million in costs, when only really implementing their "flex" scheme only in the latter part of 2009 (September onwards) - what were Evershed's thinking when they got rid of 735 people - all they really needed to do was go down the road of a half hearted attempt at the Norton Rose like scheme and they could have saved much the same.
    After all, Pinsent’s only had 19 "redundancies".
    Many law firms could take a leaf out of their book, your staff won't be able to complain because you're the one that will give them a reference, who cares about integrity and honesty in the profession, especially when you can be as ruthless as you want and still come up smelling of roses.
    We all know that you have to cut staff numbers, its how you go about it, you either choose honesty and integrity (in a profession where that should mean something, even today) and a hell of a lot of bad press to boot, or choose slightly underhand methods then see how long you can get away with it.
    "every firm has taken headcount out, whether or not they’ve been upfront about it.”

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  • The debate, sadly, appears to be limited to cost management and control. Given the obvious pressure these and other firms are under it is surprising more fundamental questions are being avoided. Surely we should be asking is the LLP/patnershop model with its high profit margins (25% - 40%) the right one? There are real alternatives that deliver meaningful benefits to law firm and client alike but few (if any?) seem willing to move away from the old comfortable/safe paradigm. Do firms need 00's of partners, does the quality/quantity of instructions justify the current structure, is effective use of work-flow providing the economies of scale. The answers are clear and until these are addressed we are stuck with cost cutting which is once only 'trick'.

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  • Interesting the comparison in Pinsent Masons and Eversheds, which in absolute terms made around the same amount of cost savings in about £19 to 21m and presumably have comparable business models.
    However Eversheds made 735 redundant and the article quotes:-
    "Pinsent Masons, which slashed £19m out of its costs last year, also did so with the help of a flex scheme. Indeed, managing partner David Ryan says the firm did everything it could to hold the whole team ­together - a decision that in effect meant very few layoffs.
    The measures include a recruitment freeze, aside from some ­targeted investments; the redeployment of lawyers to busier parts of the business; the flexy scheme, prim­arily in corporate and property; the introduction of more sabbaticals and part-time working; more secondments to clients (“we made a virtue of this”, says Ryan); and the voluntary deferment of trainees and newly qualifieds’ start dates.
    The response was almost entirely positive. “It became a cohesive effort across the firm to achieve the goal,” says Ryan. “There were good ­reasons for doing it. We believed it would put us in a strong position as we come out of the recession."

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