The 70 in-house lawyers at Lehman Brothers in the UK face a nervous wait today to find out whether or not they will be paid this month.
The bank operated a zero-cash policy in the UK, transferring the money to the US operation at the end of every day.
As a result Lehman has no funds to pay its UK lawyers. In contrast, the US in-house lawyers are assured of September pay and are even negotiating redundancy packages.
Recruitment consultancy Law Professionals, whose major client was Lehman Brothers, has posted four recruiters to the bank’s Canary Wharf offices to advise the in-house lawyers on their next move.
Ivan Jackson, the director of Law Professionals (pictured), said: “At the moment the legal department has not actually been fired, it’s in a state of limbo. There is a lot of work they could do for the administrators and they could be there for the next two to three months.”
He described the mood at the bank as being one of disbelief: “There’s still an enormous amount of surprise and coming to terms with everything. It’s a shock.”
The news comes just hours after TheLawyer.com revealed that at least 200 jobs in legal, compliance and audit team at the bank are under threat, including at least 60 lawyers (16 September 2008).
Jackson said that the in-house lawyers would have opportunities in private practice as well as in-house in insurance companies and asset management firms, but that those in senior positions may have to wait until next year to find a suitable job.