Linklaters: 270 London jobs to go
Linklaters: 270 London jobs to go" />
Magic circle firm Linklaters has confirmed that between 100 and 120 of its City lawyers will lose their jobs as part of its so-called New World strategy, while 130 to 150 members of business services staff will also be affected.
As exclusively revealed by TheLawyer.com last week the firm is seeking to drastically overhaul its structure in a bid to become a smaller, more profitable operation (23 January).
At this stage it is unclear how the firm's international network will be affected, with the redundancy announcement relating solely to London-based staff. All London staff are currently in redundancy consultation with the process due to complete in three months.
The London cuts will translate to 4.8 per cent of the firm’s total workforce while 4.2 per cent of its lawyer headcount will be slashed, based on figures published in The Lawyer UK 200, 2008.
Managing partner Simon Davies (pictured) said: “This is an action that we have taken very reluctantly and after a great deal of thought."
He added: "The overall vision and strategy of the firm has not changed, the context in which we are working has changed. There has been a huge deterioration in financial markets and that's inevitably having an impact on our clients. We have to respond to that."
While the announcement of the London redundancies was communicated to staff via an email, Davies said he would be travelling round the firm's network in the coming weeks to answer employees' concerns.
He added: "As with any global organisation we have a management structure with regional and national managing partners and they will be allaying people's concerns until then."
While Davies confirmed that no trainees will lose their jobs as part of the redundancy consultation, he would not confirm whether the number of people being offered training contracts in the future would be affected. The firm takes around 130 trainees each year.
Davies said that, while the redundancy consultation is related to the New World project, details of the wider strategic shake-up are still being finalised.
Davies is working alongside senior partner David Cheyne and the firm's executive committee on the project, which should be drawn up within the next couple of months. It is understood that the project will result in the firm's operations in Western Europe being significantly cut back.
Last year the firm axed its offices in Bratislava, Bucharest, Budapest and Prague with a number of Linklaters partners, led by former Central and Eastern Europe head Jason Mogg, forming independent firm Kinstellar (27 May). The new firm has a close referral relationship with Linklaters.
News of Linklaters’ job cuts came after fellow magic circle firm Clifford Chance announced that it is to shed up to 80 lawyers in London (8 January).
Allen & Overy has also announced cutbacks, with up to 10 lawyers in Hong Kong under threat of redundancy (16 January).
For more on this story, see the Freshfields-Linklaters arms race and the leader.
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Readers' comments (39)
G. Reaper | 29-Jan-2009 11:17 am
270 - IN LONDON?!
Ok, it's the firm's biggest office, but there are hundreds of Links lawyers elsewhere. This won't stop here.
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Gandalf the Grey | 29-Jan-2009 11:21 am
Missing Link
Linklaters made more than £500m in profit last year, yet still sees fit to put hundreds of people out of work.
Davies' "reluctance" must be little consolation to those being pushed out.
Remember, unlike the banking sector, none of these firms are making a loss. It seems like greed - pure and simple.
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Grim Rimmer | 29-Jan-2009 11:22 am
Yup
Prepare to be frazzled.
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Anon. | 29-Jan-2009 11:28 am
Sigh
Let's have no more of this cliched sermonising about 'greed', shall we? None of us joined corporate law firms for our health.
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Anonymous | 29-Jan-2009 11:35 am
What puzzles me...
...is the gamble at stake. If this massive size-slimming, PEP-fattening exercise is about seeking an American tie-up, what if that just simply doesn't happen. There isn't a huge number of US firms that would be suitable from Links' point of view, and even then there's far from any guarantee that this will tempt them. If none bite, what will Links be left with? A demoralised firm with a reputation for being a nasty place to work.
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anon | 29-Jan-2009 11:37 am
Linklaters redundancies
I don't understand this. Linklaters have done better than any other firm recently, look at the Lehmans adminstration which will keep their lawyers in jobs for years. So how come they're getting rid of more people than any other comparable firm? This is way more than Clifford Chance which is probably suffering more because of their exposure to the banks. There's something missing here!
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Anonymous | 29-Jan-2009 11:38 am
Immoral act
Most businesses would kill for a profit margin of 40%+. These cuts are NOT to ensure the continued survivial, or even the continued success, of Linklaters, but rather to preserve super-normal profit levels during a severe economic downturn. It is immoral.
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Sameer | 29-Jan-2009 11:38 am
Try Offshore
All these redundant city lawyers should try working in offshore law firms, better package, no redundancy yet and a place in the sun !
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Biff | 29-Jan-2009 11:48 am
they've always been at it
It may just be that they always have been the most ruthless and are continuing to be. I'm absolutely certain this is about much more than the crisis. You don't ditch over a hundred lawyers thinking you'll want to hire them back in two years.
The CEE pullout was a sign Links has fully embraced Cheyne's old mantra: no partner not good enough to introduce to Lord Browne (obviously in need of updating). It's committed to paring itself down to the slimmest possible firm to do the mega-deals it wants to do.
CC is a false comparison - its profit margin is 33% to Links' 44% or thereabouts. CC makes its money from massive leverage.
Leverage in Europe is lower so I'd guess the New World partner redundancies won't be reflected so heavily in associate and staff redundancies.
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The Dude | 29-Jan-2009 11:52 am
Immoral?
You always see words like that peppering popular discussion during a downturn. They're really just expressions of anger. Can't beat 'em? Join 'em or retrain as something more secure, like a maths teacher.
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