Honesty’s the best redundancy policy
At the time of writing, the number of redundancies in private practice has risen to 569. In just the past week lawyers and support staff from Halliwells, Ward Hadaway, LG and Finers Stephens Innocent have all joined that unfortunate band. If you want to check the current tally then visit TheLawyer.com, where we’re updating the situation on a daily basis.
This is unprecedented. It wasn’t like this in 2001-02, nor in the awful years of 1991-93. It’s clear that today’s firms are preferring to make their cuts early in the cycle; better to take the decision now than let things drift would seem to be the logic.
Not that this is any consolation for those who have been made redundant. At least these firms have been relatively transparent about the process, which is also unprecedented. Yet there are others – mostly larger City firms, and we all know who you are – that think doing covert headcount reduction under the guise of performance management reviews is preferable. It isn’t; it’s cowardly, and it’s not fair on the careers of the people affected.
Certainly, a good number of mediocre lawyers did well out of the boom.
We’ve all met unimpressive associates who were in the right place at the right time, although that applies even more so to certain unimpressive millionaire partners. Call me sentimental, but it’s pretty crass now to be telling associates they’re not up to scratch when the real reason they’re not being kept on is there isn’t enough work.
Meanwhile, there’s another problem that’s been highlighted by the credit crunch, and which makes this year’s redundancies different from those in the last couple of downturns.
The lawyers losing their jobs this time around are almost all in structured finance and real estate. They’re over-specialised because their firms needed them to be; it’s a shame that all that expensive training has led to so many lawyers with seemingly untransferable skills.
It would be a wonderful thing if firms were able to take a leaf out of Slaughter and May’s book and embrace the concept of the versatile generalist. But somehow I don’t think that’s likely.
Readers' comments (5)
Anon | 30-Sep-2008 12:19 pm
Are you sure honesty is the best policy here?
This is a bit like saying a recession is a good and cathartic thing... For those who were given their marching orders in performance reviews at the start of this year they have had time to find another job, and without the stigma of redundancy hanging over them (after all, you don't make good people redundant). Now the market has tanked and there are no jobs to be had. So being made redundant now might sound 'fairer' but is likely to result in a much worse outcome for the indvidual. I know which I'd prefer!
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Justin Ellis, iLaw | 1-Oct-2008 6:38 pm
Preserving profits drives the redundancy policy
The big difference is that there is much more pressure now on the management of law firms to preserve profitability by whatever means they can. In a down-turn, the first to go must be the most expensive liabilities - the staff.
In the "good old days" big firms were less profit-driven and were prepared to hang on to their staff having made the investment of training them.
Of course, these redundancies will cost the firms double when they have to go out and hire again in a year's time.
Another factor is the way the legal market works - if lawyers didn't expect 90-100% of their earnings to come from salary, they would represent a much lower risk to firms.
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Christopher Gough | 3-Oct-2008 8:01 am
Honesty's the best redundancy policy
Beginning an article about redundancies in the legal profession with a bald statement that exactly 569 people have been made redundant to date displays naivety and insensitivity in the extreme. There are something like 9,500 odd firms of solicitors in England and Wales and you think that only 569 people have been made redundant?
Perish the thought that you should have to think about people that work in a high street, or even, horror of horrors, unqualified lawyers and paralegals.
I suggest that you either 'get real' and do some sensible research or rename your publication 'The Silver Circle Lawyer' and be honest about whom you want to actually read it.
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anon | 3-Oct-2008 11:53 am
Missing the point Christopher Gough?
The Lawyer produces the UK200 each year as this is it's target market Christopher. The Lawyer is perfectly within it's rights to review redundancies in the top 200 firms on this basis therefore surely? Your comments seem to be wide of the mark. Perhaps the Gazette would be more appropriate reading material for the high street practice news?
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Anonymous | 20-Jun-2009 7:22 am
Are you sure honesty is the best policy here?
personal injury lawyer --personal injury lawyer
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