Dissing Links

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  • oh please

    Cat Griffiths has cheerleaded the magic circle in every ruthless partner cull. Remember "Freshfields gets its axe right"? It's a bit rich to turn around now and start sympathising with the victims.

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  • cheerleader

    Girt - I didn't read this piece as any different from the cheerleading that you refer to - the word "ruthless" is used admiringly, not as an admonition - Cat is in awe of the Silk Street management.

    The Lawyer has consistently taken PEP as the single most important measure of law firms (except when it came up with a radical new measure of PPP to catch out those who were "cheating"). I think that the world has moved on and we have to learn to appraise things not only in cash terms. Linklaters is a very profitable firm, but it is a bad firm. Bad for the associates, bad for the secretaries and support staff, and (though they can't see it) bad for the partners who blindly chase a meaningless PEP goal.

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  • PEP and its discontents

    Sceptic - I'm not that much in awe of Links' management, though I can see why it might come across that way. But I have met a number of City partners who have a sneaking admiration for its tough line. Hardest kid in the playground, and all that.

    The PEP issue is a tricky one. All businesses measure themselves on profit; the question is whether the PEP measurement has skewed the legal market out of all recognition and whether it alone is responsible for the legal market's current problems.

    For a number of years PEP was useful as a tool for greater transparency in reporting on law firms. And you're right, we did introduce a general earnings per partner to take non-equity partners into account, but PEP still has the biggest hold on the imagination. We journalists bear some - not all - responsibility for that, obviously.
    I could bang on about the difficulties of establishing metrics, but won't. That said, most of us would love to find an appropriate way of measuring success. Can you measure a happy firm, for example? That would be a start.

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  • At last!!

    Somebody has said it, Let's break this down into simplistic terms. Big city law firm sees that next year PEP will be down because of the state of the world/economy, rather than saying to itself lets just make do this year with PEP of say £1.2m instead of £1.4m and we'll keep a close eye on developments they decide to make a shed load of staff/lawyers redundant as we can't possibly drop a league place. Result; nearly three thousand redundancies across the board, which is not great for the economy and the lives of families. I'm all for redundancies if they are absolutely necessary for the survival of the firm but surely this is just abject greed?

    For god sake we are all human and we all have lives and families to provide for!, Law firms were always the safe bet as they did stick with staff and could see the bigger picture, what on earth has gone wrong? I'm sure that this simplistic view will be greeted with sneers and possibly amusement (by some), but come on why on earth would a firm in profit and predicted to be in profit the following year get rid of staff?

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  • Underestimating the impact

    I imagine that most of the big firms would have been prepared to accept a drop from 1.4m to 1.2m in PEP. My guess would be that they're actually looking at far more dramatic cuts if they don't take action. The problem then is that, under the UK model, the real rainmakers will then be underpaid and will jump ship to the firms that have taken more aggressive action.

    And whilst it would be nice to think that the firms who have done least to protect their staff will suffer the reputational consequences, the reality is that ambitious lawyers will still go to where the work and rewards are to be found. In the long run I bet Links and FBD come out of this in good shape.

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  • moral at rock bottom

    Moral is terrible and people are starting to think that being made redundant would not be a bad thing if just to get away from the place - the tax team is horrendous. Partners are owners of a business and they should set the base case for profits on a mid term year, not the top. Plus if our partners think they can out strip American firms, esspecially in light of sinking sterling, they have another thing to think about! I am a linklaters lawyer, get me out of here!

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  • It's spelt 'morale'

    'moral' is to do with ethics, not enthusiasm.

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  • Only in hard times...

    do most of the lawyers at commercial firms stop caring about metrics. When things are going well, many of them would not consider going to a firm that was of middling profitability and which lagged behind in relative terms with the core of its competitor group. Firms with mediocre figures are often perceived as mediocre. Quite simply, whatever people think now, while at risk, a highly-profitable firm with a reputation for a clear commercial outlook is likely to be fighting off applications from ambitious lawyers when they open the doors again (whether that is a good thing is another matter).

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  • in the real world.....

    Speaking as an ex-magic circle partner, on the one hand some partner and lawyer cuts are clearly required at most major law firms because they are simply too big and wrongly configured for their likely book of business for the next 3 years. But what the cuts at the magic circle are really about is ambition and the race to be the market leader. Links and Freshfields management are not alone in the race, but determined some time ago that profitability was to be their key determinant of success along with securing a merger with a New York white shoe firm - the two seemingly going hand in hand. Global presence and hedging across different practice areas took a back seat as partners and less profitable practices were removed and equity tightened.

    Meanwhile CC and A&O partners, whilst prepared to earn a bit less (presumably to preserve what was left of their cultures and a notion of true partnership) now cannot afford to fall any further behind as they share similar ambitions. As one of the Anon's below indicates, it is hard to argue that profitability is not a key factor in long term success (just ask Simmons partners how they feel about taking their eye off the ball on this 15 years ago) but you do have to ask how much is enough for these partners. At a time when the country is rallying aginst fat cat and bonus culture, the magic circle seems to have decided that their dreams cannot survive if pay falls below £800k. I think even Slaughters partners could actually get by on considerably less than this for the next few years but evidently not. So one firm can find over £5 million (allegedly) to sponsor the Olympics whilst making lawyers redundant (wonder how they felt reading that news) and at another, I hear internal referrals have plummeted leading to all types of internicine arguments, whilst partners keep work to themselves to protect their own figures. Amazingly , in the futile aim of ensuring everyone is working just as hard as they did at the peak of the market to keep profits up, resources are withdrawn and client service is suffering.

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