Linklaters to axe up to ten per cent of partnership in new restructuring By Catrin Griffiths 8 December 2011 09:10 17 December 2015 14:02 Sign in or register to continue reading. It's FREE Sign in Email Password Keep me logged in Forgot your password? Not registered? It's FREE! Register now Register with The Lawyer David 8 December 2011 at 09:55 Linklaters isn’t the only major partnership that could do with this sort of treatment. Reply Link Angel eyes 8 December 2011 at 10:11 So when are CC and Freshfields going to do this? Reply Link Anonymous 8 December 2011 at 10:15 This is surely the biggest sign yet that the profession is being sucked back into recession. There have long been predictions that the profession would have to shrink to be more efficient, many believed this would be led by the collapse of the high street but the recession has meant that everyone is having to ‘share the pain’. Rather than cutting jobs to save the livelihoods of the elite few, perhaps those at the top might consider taking a slight paycut? I mean, doesn’t it say on The Lawyer that Links paid its highest earning partner £2.2m last year? Reply Link Anonymous 8 December 2011 at 11:15 Interesting that the firm is talking about partners ‘retiring’ rather than owning up to ‘redundancies’. And, being the caring place it is, Links also says that its up to the partners to decide when they retire. That is blatantly untrue as the firm is basically forcing retirement on the more mature partners. One wonders whether we could see more cases for age discrimination here? Reply Link TheLawMap 8 December 2011 at 11:49 These are worrying times and a large firm such as Linklaters to be engaging in ‘voluntary retirement’ signals how badly the industry is affected. Reply Link Anonymous 8 December 2011 at 11:49 This may be shocking but it’s really not a surprise. What was really a surprise was the UK firm’s half-year figures. In the current economic circumstances how can some firms post double-digit increases in revenue? For such a transactionally heavy firm as Links there is simply no real sign of daylight on the gloomy horizon… Reply Link Thomas Verhoeven 8 December 2011 at 12:20 It only shows that all these firms are longer “partner”ships but money making vehicles only where the term “partner” is unknown. In good old days a partnership would adjust by tightening the belt of each partner until the bad times are over. Now so-called partners are kicked out. Reply Link PtL 8 December 2011 at 12:35 It’s a London problem. Nearly every firm is way too heavy there. That’s not cyclical, it’s structural. Reply Link Petroboy 8 December 2011 at 12:38 So we can soon expect a glut of CVs from Links partners “just, ah, looking for a change of pace “…. Reply Link Hugey 8 December 2011 at 12:55 When I called the second downleg the response was all too predictable. Yet firms have been cutting continually since 2009. Fear not, there are several more years of this to come. Reply Link Exiles on Silk Street 8 December 2011 at 13:20 Here’s a thought – take a 30 equity partner group from a forced exit and form a new law firm. It would result in something around the size of numerous well known firms in The Lawyer 100, and be as big as most of the firms between 60 and 100 by revenue in the UK. Clearly they’d need some leverage – but there’s plenty of lawyers on the market today. 30 equity partners plus leverage would be equal to: Mishcon de Reya, Bond Pearce, DWF, Trowers, Weightmans etc…..there’s loads more of them and they do alright. Therefore I propose Linklaters’ exiles create a new law firm. They could add in the exiles from A&O and other top firms too. It may not be as crazy as it sounds…..probably have a nicer working culture too. Reply Link Anonymous 8 December 2011 at 13:42 It would be interesting if The Lawyer did a “Where are they now” article on the MC partners shoved out in 2009? Reply Link James Hill 8 December 2011 at 13:44 Keep ’em while you need them, get rid of them when you don’t. It is so easy to ruin someone else’s life. Reply Link Anon 8 December 2011 at 14:05 If 10 per cent of partners are going then at least 10 per cent of associates will too. Get ready for far deeper cuts as the economy continues to move towards all-out depression. Reply Link Anon 8 December 2011 at 14:39 In the not so distant future global firms like Linklaters will generate as much revenue in Shanghai as London – and have a similar number of lawyers in each. That means Shanghai growing a lot, but also London shrinking a lot. This is the reality of globalisation, the West has ultimately destroyed its economy and living standards, and even solvency, through pure greed and short-termism. Reply Link Anonymous 8 December 2011 at 15:20 In a nutshell there are too many law firms and too many lawyers. In the boom times the market expanded and now it needs to contract. The legal market as it stands is not sustainable, so expect to see far more distress mergers with partners exiting the door. The bizarre PEP business model needs to go as well, and everyone accept that pay isn’t going to be as high as the good old days. Reply Link Anonymous 8 December 2011 at 15:29 Surely the question is why doesn’t somebody de-equitize Simon Davies? The big swingeing cuts are a sign of management failure, not of decisiveness. He has to make grand brutal gestures every few years because he hasn’t engaged in hands-on management of his partners. He has to do that day-in, day-out, or make sure his practice or area heads do it. His re-election would be the opportunity for someone outside of London to do the job. They certainly couldn’t do worse… Reply Link Anonymous 8 December 2011 at 15:40 FInally someone with a bit of sense. It is NOT a shame that these overpaid lawyers are being cut down to size, it is a shame that the management has failed to take measures to prevent this from happening. Decisive management making bold moves without blowing the bank is what is needed. Tell me where they are in the law? Simon Davies with his wishy washy responsive style is typical of old school management, this is a new world, Linklaters help create it, now it needs a manager to help manage it. Down with Davies! Reply Link Nicky Richmond 8 December 2011 at 16:29 This doesn’t surprise me at all. In my view it’s the first of many such stories that we will read over the next few months, if not years. I can’t actually believe that anyone is surprised. What I’m seeing is a desperate desire by management to retain profits at all costs. There is another way but firms will not consider reduction in profits. This will be a great opportunity for smaller firms to recruit real talent – lawyers who would never normally consider smaller practices. Reply Link Anonymous 8 December 2011 at 16:30 The worst part of this at all these “leading” firms is the line Partners are expected to take the pain whilst those in management remain immune from any remuneration cut – heaven forbid indeed they often get rises/bonuses at times like this – they generate no fee income and never have to deal with clients in a real life fee earning situation when the pressure is on – what would be welcome would be to see some leadership being shown by those in management in all major firms accepting they can no longer earn the vast rewards they have to date and that when market condiitons deteriorate the answer is not just to bin partners (many of whom will have worked incredibly hard fee earning for many years at their respective firms and generated significant profit and advancement for those firms). One of the biggest issues many firms face is the immunity and arrogance of the management teams and the inability for them to be called into account. I for one hope the new world will see management teams at all law firms called into account to justify their reward and position and then for there to be some appropriate “pain” taken at the management level too. Now that would be a novel idea wouldn’t it ?!! Reply Link Anonymous 8 December 2011 at 18:00 This really is inevitable. Associate numbers have been cut, leverage is down and yet profits haven’t recovered. Why? Because the Magic Circle firms have too many partners in London. All of them will do this. A and O have already announced and expect CC to follow sharpish. Considering the utter greed that has driven these partners for so long and the vast number of associates most of them have shafted one has no sympathy. Frankly these partners have enjoyed a golden age where mediocre men (and they are mostly men) were able to get rich simply through staying at the office for a long time. Reply Link Anonymous 8 December 2011 at 23:39 Oh dear. Will this be happening again in 2013? What sane person would choose to work at Links? Shouldn’t someone be asking questions about management’s performance if the axe needs to come out every two years? Here’s a crazy, crazy thought. If revenues fall 10%, why not simply accept a corresponding drop in profitability with the trade-off being a better work-life balance? Do the partners really need profit shares of over £1m a year? Half of it’s disappearing in tax anyway. Of course, I doubt such insane thinking has even crossed the minds of the individuals in charge at Linklaters. It is essential to have a firm full of miserable, overworked staff squeezed for every last possible drop. To suggest any alternative to this would be absurd. Reply Link Anonymous 9 December 2011 at 05:53 Oh dear – arrogant management, greedy partners…….The simple point here is that if you have a lockstep approach to reward and partner and associates get a hefty pay rise each year just be sitting it out, then the fixed costs rise inexorably. If cost growth outstrips revenuy growth then you go bust. WIth a lockstep firm, there needs to be a regular culling off the top of the lockstep so that costs are kept under control. Lockstep is issue – bin it, pay reasonable salaries with big bonuses when the times are good and none when times aren’t. Thus sustainability without ruining lives. Simples. Reply Link Anonymous 9 December 2011 at 08:40 Who cares, most of them deserve it – they don’t deserve what they earn, most of them haven’t got any decency to bless themselves with and they have a highly inflated sense of self worth. The problem is that they will do anything to keep their noses at the trough including bad mouthing others with more skills than they have. There isn’t much room these days for a monolingual uptight English lawyer who turned up to work, worked late and brownnosed his way to partnership. Reply Link Anonymous 9 December 2011 at 11:01 I wouldn’t worry, their CVs are probably all on the way to BLP as we speak. Those guys love giving a magic circle partner on the way out a fat guarantee for a couple of years…if you haven’t sent yours already I’d get in there, you don’t want to miss out Reply Link Anonymous 9 December 2011 at 11:08 I applaud Linklaters decision to cull its partnership rather than “making redundant” legions of its associates, trainees and support staff (i.e. those who work themselves to the bone for the firm). Many UK national firms in the last 3 years (whether they have openly admitted this or attempted to hide it) have fired en mass the lowest paid sections of their firms. The combined salary of these individuals is often less than the earnings of one partner. The result is that those remaining lower paid elements of the firm are loaded with more work and the quality of the client service is dramatically reduced. It shows inherant greed and self-preservation in the management and leadership of these firms which is contrary to the financial reality of the business. Linklaters it seems have recognised that changes need to be made financially and in the structure of its business and have made the decision to remove those from the top who maybe are not “earning” their ridiculously high pay packet. Considering how much money these partners will have earnt in their time at the firm surely no one is surprised that sympathy is absent from the comments above Reply Link Anonymous 9 December 2011 at 11:34 GREED, GREED, GREED – the sole value left at Linklaters. Reply Link Anonymous 9 December 2011 at 11:36 Very interesting range of comments. Why no mention of that bastion of the MC – good ol’ Slaughters, and their plans? They are clearly a corporate driven shop with way too many partners and associates for current levels of demand. Will their profitability drop? Will they abandon lockstep? Shunt out older or underperforming partners? My guess is yes, no and no. But they will ruthlessly cut costs – beware you S&M associates – and I suspect the more senior partners will be leaned on to “retire” – we’ve seen a bunch move on quietly to clients, public sector and to their country estates. I agree with many of the comments above – this will go on for some years. The law firm business will be hit hard and only the strong will survive (looking quite different in terms of headcount to current). Lets hope those technocrats and politicians know what theyre doing and can get the economy moving again before our profession loses 25%+of its weight. Sorry to sound gloomy but my advice to all is transform your practice to make it relevant/income producing. And hug a litigator. Reply Link Anonymous 9 December 2011 at 12:24 Re anon 11.01 Yup, we love a partner on a fat guarantee, or even a fat partner on a guarantee…makes little difference to us Reply Link Anonymous 9 December 2011 at 16:14 Concerning stuff. What do you think the implications of this trend are for a law student (like myself) seeking a Training Contract at a top City firm? I think I’m going to have to up my game for the rest of my career – working long hours, networking more and integrating more of my life into the firm I work for. Reply Link Anonymous 9 December 2011 at 17:02 to “Anonymous 9-Dec-2011 4:14pm” or, you could not bother at all, enter a profession you could enjoy, work reasonable hours and be a success in your life outside of the workplace… just a thought… Reply Link Anonymous 12 December 2011 at 17:24 In Newcastle, we can’t understand the logic of Linklaters. Surely everyone (including the caretaker, every assistant and every associate) should be made redundant before even a single partner is asked to leave? Reply Link Anthony Coleby 13 December 2011 at 11:20 The deal was always that you spent 8 years or so sacrificing everything for the partnership offer. When the offer came, there was a justification for the tough years and recognition plus financial security for the rest of your working life. That deal has gone now and I have difficulty in seeing why people are still prepared to put themselves through all that any more. Reply Link Anonymous 14 December 2011 at 11:28 The deal? For centuries, the legal profession brought people into equity after about three years (although it took a lot longer to qualify). In the mid-1990s, the mindset changed and partners realised they could pull the ladder up after themselves and make big profits. Since then there hasn’t been a deal. Making Partner just gets you onto a bigger and faster moving hamster wheel. Reply Link Name Email Cancel reply Threaded commenting powered by interconnect/it code.