Herbert Smith prepares to cut up to 51 jobs, 23 in corporate
Herbert Smith plans to cut its London headcount by around 51, with corporate heaviest hit, as it embarks on a redundancy consultation.
David Willis
The firm told staff today that it would begin a 30-day consultation aimed at cutting around 3.2 per cent of London staff headcount, the equivalent of 51 people.
According to the firm, the corporate practice will bear the brunt of the cuts, with up to 23 fee-earners set to go. Up to 19 legal PAs are also at risk, as are five fee-earners in the real estate practice.
In a statement, Herbert Smith managing partner David Willis said: “We need to ensure our London office resources are in step with current and anticipated work levels, and allow us to deliver a level of performance consistent with our strategic goals.
“It’s been a difficult decision which we’ve taken reluctantly and after much deliberation. We’ve waited in the hope that conditions in transactional markets would improve - but against a backdrop of continuing uncertainties in these markets, we believe now’s the right time to address the issue.
“This is about avoiding undue growth in our numbers. In the current economic climate, inevitably far fewer of our staff are choosing to move on. While we’re proposing a reduction in current London fee-earner numbers for corporate and real estate, in real terms - taking account of trainees qualifying later this year- this will not result in a reduction in the overall number of associates in our London office in either of these practices over the next 12 months.
“We recognise the next few weeks will be an unsettling period for our staff and a key priority for us will be to support them throughout this exercise.”
The consultation will begin next week when management and the staff representatives will discuss redundancy packages. According to a Herbert Smith spokesperson, the firm will try to encourage voluntary redundancies by offering enhanced packages to those who leave of their own accord, though the firm could not yet comment on what the packages might entail.
Herbert Smith last held a redundancy consultation in 2009 (26 May 2009). The firm cut 84 staff in London with those leaving taking voluntary redundancy.
In September 2011, The Lawyer reported that the firm was taking a close look at its corporate department after the team missed its budget target by £20m (7 September 2011), though at the time global corporate head James Palmer denied any cuts were in the pipeline.
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Readers' comments (19)
Anonymous | 30-Apr-2012 12:55 pm
Should be fairly easy to negotiate a good package given that - as they've publicly announced - the reason for the 'redundancies' is to give the jobs to trainees.
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Anon | 30-Apr-2012 1:03 pm
A lot more will doubtless be heading out the door through "stealth" processes.
City Law - aint it great.
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Anonymous | 30-Apr-2012 1:18 pm
Well, lets hope that they cancel the big Alumni shindig planned for tomorrow evening, and put the money back in the coffers to offer the proper payouts!!
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Anon | 30-Apr-2012 1:24 pm
@ Anonymous | 30-Apr-2012 12:55 pm - That sort of scummy behaviour is par for the course now, and "Silver Circle" firms are often the worst offenders.
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Anon | 30-Apr-2012 1:35 pm
Mr Willis, you and your fellow partners should be feeling extremely proud.
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Anonymous | 30-Apr-2012 3:35 pm
It is the bloated business support functions in these firms that needs looking at and numbers reducing (I would start with Human Remains), not the fee generators/engine rooms.
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Monty | 30-Apr-2012 3:59 pm
First A & O, now Herbert Smith. Very unfortunate news. The herd mentality in city law firms means that this will be repeated by other law firms. Large trainee intakes are premised on a bullish market. Currently, business does not match trainee intake levels and associate attrition remains low due to economic uncertainty. Yet firms still need a large number of trainees to provide cheap labour as associate salaries are unsustainable. The whole system is rotten.
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Anonymous | 30-Apr-2012 7:44 pm
To the poster above, I don't think it's Associates' salaries that are unsustainable - firms like HS should look at their top earners and start asking if they really are worth what they get paid. After all, who is it that does most of the leg work on the average deal in these corporate teams that seem first in line for the chop at these firms.... the Associates.
I would challenge anyone that isn't part of the elite circle of partners earning close on a million or more a year (which may or may not apply to HS' top people) that would say those partners are worth what they are paid. Moves like this are done only so the top earners can keep taking their massively over-inflated pay packets year after year, with a little extra if the urge arises....!
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When will they learn | 30-Apr-2012 8:37 pm
How many hr people at Herbies? Shouldn't those of that ilk go first?
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GHoward | 30-Apr-2012 9:46 pm
Once again after being assured that these huge "initiatives" can only be for the greater good of all at Herbert Smith, when are the likes of Willis and Scott going to realise that most of us with any form of intelligence had seen through their smokescreen of reassurances long ago?
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