News UK Exclusive: Linklaters to axe up to 70 partners in massive shake-up By The Lawyer 23 January 2009 23:59 13 December 2015 21:56 Sign in or register to continue reading. It's FREE Sign in Email Password Keep me logged in Forgot your password? Not registered? It's FREE! Register now Register with The Lawyer Anonymous 23 January 2009 at 13:14 Here we go again… Linklaters axing people? And the news is….? Can’t say I’m that surprised. Reply Link Anon. 23 January 2009 at 13:16 Not surprised About time- the ecm group is far too large and specialised. I suspect the real niche practice areas will be hammered and those who are a bit more generalist will thrive. Slaughters is the example of just how well firms can do in this climate Reply Link Jobby McGhee 23 January 2009 at 13:17 Poor associates So the partners think that it’s acceptable to sack people to get their profits up to £2m? In a recession? They’ll be wanting a government bail out next. Reply Link Links 23 January 2009 at 13:18 Ha! Thought they’d been a bit quite recently… Reply Link Anonymous 23 January 2009 at 13:28 Silence from within LL Amazing that Linklaters employees should first learn about the planned redundancies via the Lawyer rather than direcly from the partnership. Poor show. Reply Link Anonymous 23 January 2009 at 13:45 Culture I like this sentence: “But some observers of the programme said that it could endanger the collegiate culture of the partnership.” Reply Link Fatigued 23 January 2009 at 13:51 When does it stop? You have to wonder at what point Linklaters partners – even those who are performing – get bored with all that grief. And for what? A few dollars more? A smile from Cheyne and Davies in the corridor? Certainly not the reaction at cocktail parties from peers in other firms. That has been stuck for a while at “pity”. It will now turn into “disgust”. Reply Link Anonymous 23 January 2009 at 14:06 Count the numbers A cut of 70 partners would equate (roughly) to around 18-20% of the partnership if you assume partners and members are the approx the in the firm’s LLP accounts. Assuming that all partners are equity partners, then using the firm’s PEP figure for 2007/8 it amounts to around £70m of partner profits. The LLP accounts show profits before members expenses and discretionary division of around £435m. While there is plenty of room to argue some of the accounting semantics it is hard to resist the conclusion that there is a risk of a serious collapse in profits if steps are not taken. Reply Link PM Dawn 23 January 2009 at 14:13 This could be interesting… The magic circle are the only firms to rival the Manhattan elite, but have always had lower PEP. A move that increases profitability to NY levels could be really interesting, removing one of the last major cultural distinctions between the two. If pulled off successfully, this could be the dawning of a new era… Reply Link Anonymous 23 January 2009 at 14:19 Links – your lipstick is a tad smudged… Linklaters could have given its sacked partners and associates the dignity of taking this step soberly and regretfully, rather than dressing it up in cheap, tacky and transparent management-speak as “Linklaters New World”. As artfully put by the incumbent President “Put lipstick on a pig – it’s still a pig”. Reply Link Anonymous 23 January 2009 at 14:22 Priceless This is priceless…”There’s a high degree of consensus [within Linklaters]. I’ve not seen any dissent or sense of unhappiness about this.” I.e. we haven’t told anyone, and as a result, we feel we are in a position to say that no-one is displeased. Only the best of lawyers could come up with that. Reply Link Anonymous 23 January 2009 at 14:42 Nothing to do with PEP of course…. This has nothing to do with Links partners wanting an even greater share of their profit pie in a downturn of course….maybe all the stories of Kaka’s estimated financials from a projected move to man city got them thinking…. Reply Link Anonymous 23 January 2009 at 14:50 US merger Links wants to merge with a US firm and they are hoping that this will make the firm more appealing. No self respecting elite outfit would want to merge with a firm that is willing to cut so many of its lawyers so ruthlessly. We all know Links wants to merge with Sullivan & Cromwell. Not going to happen. That firm has spent hundreds of years carefully building a culture and brand that is loyal to its people. It rarely gets rid of anybody. Links has proved it only cares about the next 12 months profitability and does not have any long terms perspective. Reply Link Anonymous 23 January 2009 at 15:04 Totally lacking any class… beyond belief When I saw ‘Linklaters New World’ I genuinely thought the article must be some kind of joke (not a very funny one). That is crass beyond words – to model the firing of so many people in that way. What planet are the top people at Linklaters on? Show some class and humility, please. Unbelievable. Reply Link F. Lucre 23 January 2009 at 15:17 Come on You who are so outraged at this, consider the following assertions then see if you still feel the same way: 1) The Linklaters partnership is clearly bloated. Many deadwood partners, and many unnecessary far-flung offices that have hung on too long. This isn’t sweeping, it’s overdue. 2) Linklaters partners might be well paid compared to workers in other sectors, but compared to their contemporaries in New York they’re really not that well paid. The talent in the magic circle is clearly world-standard in nature, but the profit is domestic. 3) Compared to bankers, who are not obviously more skilled, nor in more demand, or better trained, etc, corporate lawyers in general aren’t that well paid. Any firm that is seeking to narrow the divide should be applauded – and others will follow if they succeed. Reply Link ANon. 23 January 2009 at 15:21 last post Quite. The rest of the magic circle are no doubt tutting about what an awful place Linklaters is, but watch as their partners switch sides after the offer of a bank account twice the size. Reply Link Anonymous 23 January 2009 at 15:28 Yes, but… That may be the case, but surely you agree that this appears to be an extraordinarily inappropriate way of going about mass redundancies (whether justified and necessary or not). Reply Link Mike 23 January 2009 at 15:29 It’s the money, honey Hear, hear. All of you in commercial law are in it because you want to get rich – if you didn’t you’d be doing civil rights or something instead. Reply Link Anonymous 23 January 2009 at 15:31 Confidence Not saying it is a surprise but the title of this project ‘New World’ and the initial outlay to cover redundancy packages is going to cause more problems in the short term than I think they believe. It makes graduates and trainees feel very secure in working for a firm that chops you so easily. Reply Link Anonymous 23 January 2009 at 15:40 Tough job on their hands Linklaters believes that to be globally competitive they have to be competitive financially, on the basis that the best lawyers all want to work in a place that pays the most money. They believe that this is the most visible sign of success and they need to step up. But it’s very risky. It’s very hard to get rid of 70 partners and sustain a law firm, no matter how big you are. This will put tremendous pressure on the leadership. It will be very, very hard to pull this off in a way that leads to a good esprit de corps among the people who stay, a feeling that for those remaining they made the right decision. Reply Link Anonymous 23 January 2009 at 15:40 Still money for some things! All these job cuts are helping to pay for the £30m refurb of the Linklaters Palace, including, would you believe £5M on a gym!! Reply Link Anonymous 23 January 2009 at 15:43 Cliffords I’m amazed Clifford Chance didn’t take the same approach. Plenty of deadwood partners there. The best way of saving costs is to kick out underperforming partners. Reply Link Anonymous 23 January 2009 at 15:43 Fad diet Linklaters’ move is a bit like someone who suddenly decides to go on a diet in an attempt to find a partner. They’ll shed a few pounds and end up with someone, but it won’t be the one they want. Reply Link Renee Berliner Rush 23 January 2009 at 15:47 A new world This move highlights the fact that it really is a new world in the legal arena and I don’t think things are ever going to go back to the way things were. The economics are changing. For one thing, the top clients of major law firms are starting to demand caps on deals and are no longer willing to pay for first and second year associates on deals. Reply Link Splatty boy 23 January 2009 at 15:48 Lessons from the master Linklaters and the rest would do well to look to Rosenblatt for a lesson in PEP management – Rosenblatt’s PEP regularly exceeds £2million which bests many so called Magic Circle firms. Even in this market it is unllikely to dip below £1.5million and that without any redundancies Reply Link Anon 23 January 2009 at 15:54 Rosenblatt Yeah, but Rosenblatt only has one equity partner – Ian Roenblatt….. Reply Link Anonymous 23 January 2009 at 16:00 US merger NY elite firms would never want to merge with Linklaters. The cultures do not fit – UK firms are overly managed and NY elite lawyers just don’t work like that. As long as my practice is making money I am left alone. Why would I want to change that? Firms in the tier below may well be interested. In NY the rich get richer and the poor get poorer. Perhaps some of these second tier firms that are suffering will be willing to make the sacrifice. Reply Link Former Linklaters and proud of the "former" part 23 January 2009 at 16:11 Law firms are the new investment banks Come on, this is not a surprise! Linklaters has been trying to act like an investment bank for years and years. In 2008 they got rid of Cologne and four offices in CEE in a bid to lose weight in unwanted places. This is only phase 2 and there may well be a phase 3 – the ideea is to turn partners into employees with a profit-linked compensation scheme. They will pay very well and ask people to accept the fact that getting fired pretty easily comes with it. The culture there has been changing a lot in the past few years and will continue to further evolve towards that in investment banks. Reply Link A LL associate with an uncertain future 23 January 2009 at 16:11 What world do you guys live in? Most investment banks (some of Linklaters’ biggest clients) have incurred multi-billion dollar losses and have been sacking people in their hundreds. New deal flow is down, and given the current economic state, will remain down for the foreseeable future. The amount of stupid liuquidity in the system that fuelled the boom of the last 8 years has gone and will not come back for quite some time, if at all. Add to this the fact that over a 100 trainees come in every year, increasing the size and cost base of the firm. In normal times, that is offset by people leaving to join banks/other firms/pursue other careers. But normal attrition has come to a halt while new trainees are still coming in, which means an expanding, costlier business with lower revenue being generated per person. And law firms are a business run by partners for making money for themselves, not for associates or business staff. That’s how it works. In an ideal world, there would be no sackings and everyone would accept lower incomes – the partners, the associates and business staff. But reducing salaries or partner profits is not really an option, not when you want to attract the best/most competitive lawyers. So please do the maths yourself. The process should have been handled properly – no word still from management, which is shameful. And it is terrible to fire people at any time. But the underlying drivers make economic and financial sense. That’s how capitalism and free markets work. Reply Link Ageing cynic 23 January 2009 at 16:23 Greed unlimited “Compared to bankers, who are not obviously more skilled, nor in more demand, or better trained, etc, corporate lawyers in general aren’t that well paid. ” No, it must be tough having to struggle along on £1m a year. The sheer greed of these people is disgusting beyond belief. Schadenfreude has rarely tasted so sweet. Reply Link A lawyer! 23 January 2009 at 16:52 Why such a bid deal??!!?? I dont know why such a fuss is being created… its not like Links is the only firm to have laid off people. All firms have done so and because of the sheer size of the firm, the numbers are massive!! Though I really dont appreciate the so called management of the firm keeping things under wraps. Even a mail would have been sufficient. Reply Link A Business Services Lackey 23 January 2009 at 16:54 We’re not all rich lawyers.. Spare a thought for all the support staff that will be impacted by this move. We’re not all rich lawyers who can pop off to other firms with tales of how we once lived the high life at the expense of clients. Shocking that we find out al this from the press as well. Especially when improving communication is one of the firm’s strategic priorities. Reply Link Anonymous 23 January 2009 at 17:20 A big move While I think the Links Cull is obviously a monumental move, I feel that it is also a huge gamble. Im in a silver circle firm, and we are constantly looking upwards and trying to close the gap on our more illustrious counterparts. Has anyone considered the ramifications if this fails? Freshfields took a gample reducing it’s partners 2006, a move which ultimately paid off, and now they probably have the best business model in london, and in my dealings with them that statement has been vindicated. However it suceeded not by luck, but by very good management. Links management will have to be of the same calibre, or risk doing irrepairable damage to it’s brand. Reply Link Top Jimmy 23 January 2009 at 17:39 Oink Greedy pigs Reply Link Anonymous 23 January 2009 at 17:48 Here’s an idea .. Instead of being bought off by generous severance packages, why don’t these 70 Linklater partners leave and form a new firm 70-strong? By definition, the new firm will be Linklaters quality, it will doubtless have an instant client base of top clients, many Linklaters associates who like working with these partners may be willing to jump ship, and plenty of associates at other firms will want to join them. Obviously I’ve got no clue what restrictive covenants are in place, but that sort of thing can always be sorted. Anyhow, waiting out the recession during garden leave might not be worst thing in the world right now. Reply Link Friedrich Blase, KermaPartners 23 January 2009 at 18:17 Linklaters tough? It is a mistake to put Linklaters in a bucket with other firms. The reasons for partner redundancies range from strategic to panic. While Linklaters is more on the strategic end, that cannot be said of all firms. No doubt, what they are proposing is tough, very tough. But Linklaters is a tough firm; they are rigorous, but not ruthless. I cannot imagine that any partner in the firm believed he had tenure. If so, you might argue that he deserves to get fired – for lack of business judgment. Reply Link Kevin O'Taws 23 January 2009 at 21:06 ‘Twas ever thus. Linklaters partners in a ruthless cost-cutting measure? Associates afraid of losing their jobs and thus exerting ever greater pressure on those around them? Employees of the firm disappointed that no mention of “Linklaters New World” appeared in the weekly missive from management? ‘Twas ever thus. Reply Link Inhouse and Happy 23 January 2009 at 21:33 Silver circle can’t spell Well, as an inhouse lawyer, I shall have to stick with the magic circle firms, if only in order to ensure my documents don’t contain appalling spelling errors – see “Freshfields took a gample reducing it’s partners” from Anonymous (good decision) at 17:20. All lawyers are greedy, just some are more greedy than others. Reply Link Anonymous 23 January 2009 at 22:18 Linklaters How much more profit DO they want to make? What’s happened to the caring employer etc etc? As usual, its all window dressing and despicable that the staff should find out about this from the press!! The hatchet man has landed……. Reply Link Dieter 23 January 2009 at 22:59 A&O With A&O it will be the same in no time. Pretending they will not be any redundancies does not solve the issue there is just not enough work in several departments. Being frank about it, will help the one affected to find a new job – and it is inevitable. Reply Link Thomas Cooling 24 January 2009 at 06:27 What now for trainees? It is difficult to see how Linklaters can sustain trainee recruitment (at c.140 p.a. in London), which was already high before this cull was announced. Reply Link Anonymous 24 January 2009 at 10:53 Thank You A big thank you to The Lawyer for keeping the staff here at Linklaters informed and up to date. It is a real shame that Linklaters’ management have not taken the same approach. Transparency is a word that is used here often. What a load of cobblers! Reply Link LawKid 24 January 2009 at 20:50 Makes sense to me Some interesting points of view here. At the end of the day we are going to be seeing so much more of this throughout the year. The boom years have well and truly come to an end for the next few years, potentially the next decade as we wash this bad debt through. Reply Link Anonymous 24 January 2009 at 21:35 mhh I only recently signed a training contract with them .. should I be worried? Reply Link The All Seeing Eye 26 January 2009 at 11:09 The Credit Crunch Myth! Many, many firms across the land are getting rid of personnel NOT IN RESPONSE to the credit crunch, but because their management has been weighed, measured and found wanting. This age of medicority with its accompanying management culture is not capitalist, it is incompetent (just as the city boffins are not experts just lousy gamblers). To use a biblical sentiment: “Ye brood of vipers… you cannot get through the door of the kingdom of heaven yet ye bar the way for everyone else.” They made profit from a credit intoxicated economy that sold £10 notes for a fiver!!!! What genius!!! Now though they have to pull that same fake profit from an economy that will not suffer idiots. So what do these idiots do? They TAKE ADVANTAGE of the credit crunch dogma to hide their incompetence behind swinging cutbacks – 2 second horizon management for a mediocre age. So much for the silver circle – somebody should go down to the janitors room and look for the polish cause there ain’t any here. Reply Link Maurice MacSweeney, Charterhouse Partnership 26 January 2009 at 18:07 In response to mhh, the future LL trainee mhh, I work in legal recruitment have had many similar questions from concerned candidates over the last few months. Bear in mind that by the time you qualify the financial markets should have rallied and the legal landscape will (we all hope!) look much better than it does now. Also, many senior figures in City firms have stressed that the unfortunate redundancies which are being made won’t generally affect trainees as badly; partners are keen to avoid taking hasty action now, only to have a dearth of bright, well-trained young lawyers when the market turns and the work begins to flow in higher volumes again. Remember too that quality will always out. You’re good enough to have been offered a great training contract, and as long as you’re keen and make yourself visible by working hard and putting yourself forward for as much interesting work as you can, then you’ll be giving yourself the best possible chance. Even in a downturn there are firms recruiting top quality lawyers; there may be fewer options than in recent years, but despite all the doom and gloom we’re still recruiting for interesting roles with top quality firms. Reply Link Anonymous 26 January 2009 at 22:47 A silver lining? I am an associate in the banking department at Linklaters. For the first time since the credit crunch began, it seems that the associates are generally bonding through their mutual hatred of the partners in the department. However, to add insult to injury that 10 per cent of us probably won’t be at Links from the beginning of March, the banking partners are pretending to be morons and saying that they didn’t know that the redundancies were about to be announced. Reply Link Anonymous 27 January 2009 at 01:25 Outsourcing For Dummies As many companies are bringing back outsourced contracts in-house having made costly mistakes…. Links is pushing internal support services out the door hoping they can cut costs and become more effective at delivering value to the practice. They seem to forget that they grew the business on the very back of that strong internal capability. Could this be the straw that broke the camel’s back…. Reply Link Anonymous 27 January 2009 at 10:54 Indian Associates In all of this, the safest people in the City of London and the Wharf are Indian qualified Associates. Since most have been hired from a strategic view of the Indian market opening up, they would in all likelihood remain untouched by the redundancy wave. Reply Link Anonymous 27 January 2009 at 15:01 Article on Linklaters What a contrast to the heart-warming stories of those on assembly lines taking paycuts to keep their fellow workers on the payroll. Here we have senior partners at Linklaters prepared to sack fellow partners to maintain their own one millon pound + profit shares. I can’t understand why the partnership as a whole stand for it. Reply Link Anonymous 27 January 2009 at 15:37 All animals are equal Isn’t it about time that Links severed the Cheyne! Reply Link anon 5 February 2009 at 22:15 Why is this greed? There has been alot of talk of partner greed – yet is this greed? Partners have generally worked their knuckles to the bone to get where they are – 6 years of studying and training, then long long hours and pressure over many years, then going through a very rigorous process to even make partner. The work doesn’t stop there, they continue fee-earning alongside all the other commitments: training, BD, HR, mentoring, etc etc. Yes, its handsomely paid – but isn’t this why the trainees/associates join a Magic Circle firm too (or even choose law as a career) – for the prestige and the large paypacket? Theres a certain amount of hypocrisy here…. Reply Link Anonymous 9 February 2009 at 20:37 US merger Very sad. Linklaters seems to have lost its sense of professionalism. If they’ll sacrifice lawyers for the sake of money, would they also sacrifice their professional standards? They might, say, leak confidential information, engagein conflicts… all in the name of the bottom line. Sadly for a great firm like Linklaters, its chance of a merger with a leading NYC firm is slim. Its management really has no idea. The NY elite — Cravath, Davis Polk, S&C and Wachtell — simply don’t cut lawyers. This is well known. It’s too damaging for firm collegiality. Surely the best people have a strong sense of professionalism that supersedes the need for a few extra dollars. Reply Link Anonymous 11 February 2009 at 03:15 Would they… That’s quite a strong position, and quite simply unjustified. Shedding lawyers in a recession is of a different order than ignoring professional standards. You might as well say “Aha, they’ve sacrificed staff! Would they also sacrifice… sheep, to the gods of prosperity?”. To imply wrongdoing and a failure of professional standards off the back of what is, at worst, poor communication of a sound business call in a difficult recession is crass and a little underhand… Reply Link Anonymous 11 February 2009 at 15:16 Linklaters standards slip Who’s talking about sacrificing sheep? The willingness of Linklaters to sacrifice lawyers in a difficult economic environment needs to be properly understood; their stated aim is not simply to manage prudently, but to earn super-sized profits that makes them competitive with the NY-elite. When the pound was strong, Linklaters’ press releases even trumpeted the fact that their reported profits were comparable – or even exceeded – the profits of some top NY firms. Their primary aim, it appears, is outsized financial performance. Not profits, but profits that would place them among the most profitable firms in the world. This is not simply a case of managing difficult financial conditions; the firm’s approach demonstrates an emphasis on profits that is quite extraordinary for a professional services firm. It is a partnership, remember, not a public company beholden to shareholders. Linklaters absorption with profits raises the serious question about what it else – other than people’s livelihoods – it migh sacrifice for the dollar. I say let’s question their professoinal responability. It’s a fair question. Also, look to the top NY firms. Why are they not also cutting lawyers? Ask yourself why. Reply Link Name Email Cancel reply Threaded commenting powered by interconnect/it code.