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.
View results 10 per page | 20 per page
Readers' comments (19)
Anonymous | 1-May-2012 3:09 am
It is a business at the end of the day. No one wins from associates sitting around doing nothing. Let's get a bit of perspective here. I was at HS during the last redundancy round, and some associates who had been at the firm for 18 months walked away with 55k+
Unsuitable or offensive? Report this comment
Mrs Palmer | 1-May-2012 9:42 am
Poor James Palmer. It must be hard for him to accept the fact that his precious corporate department is now the ugly step sister of the considerably more profitable litgation department. He will probably still be denying that the firm is laying off anyone in corporate when they hand him his own pink slip. Wake up and smell the coffee James!
Unsuitable or offensive? Report this comment
Anonymous | 1-May-2012 9:53 am
Willis should do the firm a favour and make himself redundent. That picture does a great job of capturing his creepy vampire-like essence. The reason he's not smiling in the picture is because he doesn't want you to see his fangs.
Unsuitable or offensive? Report this comment
Who's Next? | 1-May-2012 10:17 am
I heard that Hong Kong and Beijing are next on the list. My friend in Herbies' Hong Kong office said that the firm overhired last year in anticipation of an IPO boom that never materialised and now they have a lot of expensive corporate associates taking three hour lunches and going home at 6 every night. You know management won't let that go on for long.
Unsuitable or offensive? Report this comment
Anonymous | 1-May-2012 1:05 pm
Last time round everyone who kept their jobs had to fill the gap that their colleagues had left without a hint of gratitude from those on their pedestals. Walk past the HR groups at any given time, the offices are full to bursting with people who do virtually nothing apart from when trainees start or redundancies begin. And whats the point of business development when people are being pushed out - who is going to handle all this 'business' if and when it comes in? Lets not get onto the middle managers who it seems have escaped from the whole process....
Unsuitable or offensive? Report this comment
Anonymous | 1-May-2012 5:39 pm
I agree with the majority of sentiments expressed here but I think it's a bit simplistic to just say that partners should take a pay cut.
Some might argue otherwise but the reality is that most lawyers are primarily driven by money. If PEP drops then star partners will likely move firms (see all the recent movement of partners from MC to US firms). If the star partners leave then the clients will leave and PEP will reduce further.
This could easily lead to an even greater number of associate redundancies being made at a later stage than the number that would have needed to be made up front to prevent this process starting (as well as do much more damage to the reputation of the firm).
Unsuitable or offensive? Report this comment
Anonymous | 2-May-2012 6:58 pm
We all understand the importance of maintaining PEP in order to hold on to talented partners. The problem is that law firms need leverage, ie, associates, in order to generate meaningful profits. Firing countless fee earners while maintaining an equity partnership with countless underperforming partners and a bloated support infrastructure of HR and BD minions is not the answer. Herbies has been on a downward spiral for years now and this is just another step down in the long descent into mediocrity.
Unsuitable or offensive? Report this comment
RG1 | 3-May-2012 4:33 pm
@ Anonymous | 1-May-2012 5:39 pm: It may or may not be the case that most lawyers in the Magic or Silver circles are primarily driven by money but don't tar those of us outside that rarified atmosphere with the same brush.
Many, many, lawyers are driven by a desire to get the best results for our deserving (and sometimes not so deserving) clients rather than just in it for the moolah. We all need to make a living, but we aren't necessarily primarily driven by money.
Unsuitable or offensive? Report this comment
Anonymous | 5-May-2012 6:11 pm
Their Gulf offices are in turmoil and woefully underperforming and their Saudi tie-up is on the verge of collapse.
Unsuitable or offensive? Report this comment