Linklaters extends restructuring with up to 70 partners facing the axe
Linklaters’ partnership restructuring is set to be more widespread than previously thought, with partners higher up the food chain now bracing themselves for a cull.
Simon Davies
Sources close to Linklaters suggested that the firm is set to axe up to 70 partners, up on the figure of roughly 30 originally thought to be under the spotlight.
The cull is understood to be spreading to partners higher up the firm’s hierarchy.
A source said some “plainly very good partners” in the firm’s core areas were facing the axe, including in mainstream corporate.
The Lawyer has learnt further names of several partners who have been requested to exit the firm, mostly covering banking and finance.
The restructuring is also thought to have broadened to partners outside London, notably in capital markets, with managing partner Simon Davies understood to be travelling around the firm’s non-UK offices identifying partners less crucial to the business.
The restructuring was originally believed to be focused on the City operation (8 December 2011).
Germany is not understood to be affected, but Davies was in Frankfurt last week explaining the process to partners in the jurisdiction.
Davies is currently facing a poll to re-appoint him as global chief, but no partners are standing against him (12 January 2012).
There is understood to be concern among partners with management portfolios that a list of members set to be axed has not been circulated internally, making it tough to staff instructions.
Linklaters management is in ongoing discussions with partners, with the firm believed to be giving members time to find positions elsewhere.
The size of the latest cull would bring it closer to the level of the wholesale New World restructuring in 2009, in which 70 partners and 10 per cent of associates were axed (23 January 2009).
Magic circle rivals Allen & Overy (A&O), Clifford Chance and Freshfields Bruckhaus Deringer have all vowed not to carry out their own restructuring (9 December 2011), but A&O recently admitted that it has returned to managing its equity by removing between 1 and 3 per cent of partners per year (28 November 2011).
Readers' comments (10)
Anon | 16-Jan-2012 12:12 pm
Few understand just how bad the economy is going to be over the next few years. This is going to be a depression on a scale comparable to, if not deeper than, the Great Depression, and it seems that Linklaters has chosen to prepare itself.
Most seem to have their heads firmly in the sand, and are in for a shock.
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Anon | 16-Jan-2012 1:34 pm
There is also no doubt a large element of seeking to right-size the firm's platform, which is too heavy in Europe, and particularly the UK, and too light in Asia, particularly China, and North America.
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Anonymous | 16-Jan-2012 3:31 pm
The same process will happen at other law firms. It's just a matter of time.
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Ashley Balls | 16-Jan-2012 8:41 pm
There seem to be other issues at work - not just planning for a future recession; Top among these would appear to be maintaining the incomes of the great and the good at all costs. Given it is less than two generations since L&P had 20 partners perhaps it is tiem to consider teh whole governance and ownership structure of large law firms. The partnership model has changed to the point where today partner to qualified staff ratiosn have ballooned out to 1:10 from the 1:3 of a generation ago. Perhaps it is time to consider a model where partner numbers are reduced (after all who really needs 'directors' by the hundred for a single entitiy) and introduce a new model with graduated scales of income. Whilst there may still be a some status in being a partner the power/control function is illusory and largely irrelevant. A more equable distribution of profits woudl lead to greater stability all round. After all who really believes partners actually earn 1-2 Million? It defies logic as individuals they don't 'own' the client relationship the partnership does. Their contibution in fees is generally considreably less than their cost of 'employment'. The suggestion that partner incomes is a reward for all those years at the coal face simply doesn't hold water as the volume of partner mobility makes so clear. Plan fo rthe future yes, but get a better more sustainabel model. What we are seeing now is tinkering and slavish adherence to the status quo. Where is the leadership and innovation?
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Anonymous | 16-Jan-2012 11:10 pm
It is clear to me that field of law has largely forgotten what it means to be a true profession, taking care of its partners and staff through the ups and downs.
All to often, particularly with this firm it seems, the axe has been taken to the partnership and staff in the most aggressive manner in the history of law instead of hunkering down during the tougher times, possibly asking the older/wealthier partners who are more able to deal with being out of work, and saying to the rest look you have worked hard for your brethren and now we will stand by you during the tough times.
It simply cannot be suggested that Links is unprofitable or on the decline. Three of my deals at the moment have Links involved and if anything the partners and associates are overworked and struggle to turn things in a timely manner. Morale there is clearly very low.
The bottom line is certain law firms are being managed solely and strictly for profit instead of realising that you can have a tremendous firm with good morale and an eye on profits but not necessarily being the most profitable. You still can attract and keep top lawyers at these firms and in turn attract the best clients and matters. Ultimately this sole profit motive is short term and has and will continue to damage the brand. This is the legacy of the current management who really seem to be one trick ponies during the tough times.
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Anonymous | 17-Jan-2012 0:43 am
Fat greedy white men - if they can't stop playing games, destroying their associates lives and actually make some money then they shouldn't be there - good riddance. I guess they can all set up a consultancy pretending they know everything about nothing.
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Corporate lawyer from India | 17-Jan-2012 7:00 am
What is the purpose of studying in Oxbridge colleges and getting to biglaws when there is no job security ? Thank God I cancelled by LLM in UK and continued sticking on with my good old local firm.
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Anonymous | 17-Jan-2012 11:56 am
Dear sirs
In one of your blogs a comparison was drawn between Nick Clegg's eulogised John Lewis Partnership and Linklaters LLP. I write on behalf of the good people at John Lewis Partnership to protest in the strongest possible manner at the insulting comparison between their partnership and that of Linklaters. It is quite clearly the case that a sales assistant has more involvement in management and strategy direction of JLP than does the average Linklaters partner. I use the term "average" advisedly, while all partners are equal it does appear that some are more equal than others. This Orwellian utopia is rounded off by the current, fully democratic, vote for the single incumbent managing partner candidate.
(The other rather fundamental difference is that of course JLP is a partnership involving all employees, but let's not go there.)
While we all applaud "focus", it is fascinating to observe the current disconnect between entrenched management and the supposed owners of the business.
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Anonymous | 18-Jan-2012 1:02 pm
I loooove Simon's picture. Is he praying for salvation? Is he a saint that we mortals can only look up to? Is he a cartoon character that just got wacked in the head with a blunt object?
All of the above questions can also be linked to his management of Linklares so, one final question for the road: Is the PR department at Links sentient?
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Anonymous | 18-Jan-2012 5:43 pm
Maybe the revolution will begin here among brassed off lawyers...
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