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Recession begins to bite as redundancies mount; corporate in the firing line
Osborne Clarke and KLegal are the latest firms to announce partner redundancies as corporate malaise continues to grip the City. Osborne Clarke has made redundant four London corporate partners, four associates and a handful of support staff in a bid to make the firm more profitable. KLegal is also cutting six of its London partners after it axed 20 fee-earners and 42 support staff this summer. The firms are just two of a growing number to be looking at partner redundancies as a quick, effective way to cut costs and boost profitability. RadcliffesLeBrasseur and Addleshaw Booth & Co have both instituted redundancy programmes at partner level, while Denton Wilde Sapte is also understood to want to reduce its equity partnership. Of the Osborne Clarke partner redundancies, two are equity and two are fixed share. The associate redundancies come from the corporate and employment departments. Managing partner Leslie Perrin told The Lawyer the redundancies were a reaction to the long-term decline in corporate work, particularly arising from the technology sector. "We have delayed taking action for probably too long," he added. "Profits took a big hit last year." Average profits per partner fell by a massive £100,000 in 2001-02, according to The Lawyer 100. But despite the cuts, the firm has made two lateral hires in the corporate department in the past six months, picking up Brian Rutherford from Altheimer & Gray in August and Olswangs' former head of corporate Adrian Bott in May. The firm now has a total of 103 partners, up on last year's figure. The KLegal redundancies come after its merger with Scottish firm McGrigor Donald in March 2002. All cuts are from the KLegal side with the corporate department hit hardest, although banking is also affected. A downturn in the economy coupled with the increase in personnel following the merger is being blamed for the cuts. The departures will leave 28 partners in the London office. KLegal declined to comment. In July, KLegal offered its graduate recruits a payment of £10,000 to defer their start dates (The Lawyer, 22 July 2002). The news came in the wake of 700 job cuts at KPMG.