Linklaters to axe up to ten per cent of partnership in new restructuring
Linklaters is set to cull over 30 partners across the network as part of the firm’s biggest round of layoffs since the New World restructuring in 2009.
Linklaters is set to cull over 30 partners across the network as part of the firm’s biggest round of layoffs since the New World restructuring in 2009.
The Lawyer has learnt the names of several partners who have already been asked to leave. It is understood that the focus of the shake-up is on London but that between 10 and 15 per cent of the worldwide partnership could be at risk.
The restructuring was confirmed to London partners last week, with both exits and de-equitisations on the cards.
A source close to Linklaters said: “The view is that it’s being done because the firm is too big for the market. The markets aren’t going to return any time soon so we need to resize. It’s a hard decision.”
A Linklaters spokesperson said: “We continually look at our business and partner base in the context of the markets and our clients’ needs. A natural part of this process includes some new partners joining and some partners moving on.
“Decisions about partner retirements are entirely personal to the individual partner and it is therefore inappropriate to comment on speculative numbers involved. Where decisions are taken by the firm, they are taken reluctantly and only ever in the long-term interests of the firm.”
The magic circle firm axed 70 partners and 10 per cent of associates in 2009 as part of the New World restructuring (23 January 2011).
Last month The Lawyer revealed that Allen & Overy had starting managing its equity against after a two-year pause, with 1-3 per cent of partners pruned out.
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Readers' comments (34)
Anonymous | 8-Dec-2011 6:00 pm
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.
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Anonymous | 8-Dec-2011 11:39 pm
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.
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Anonymous | 9-Dec-2011 5:53 am
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 revenue 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.
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Anonymous | 9-Dec-2011 8:40 am
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.
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Anonymous | 9-Dec-2011 11:01 am
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
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Anonymous | 9-Dec-2011 11:08 am
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
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Anonymous | 9-Dec-2011 11:34 am
GREED, GREED, GREED - the sole value left at Linklaters.
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Anonymous | 9-Dec-2011 11:36 am
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.
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Anonymous | 9-Dec-2011 12:24 pm
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
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Anonymous | 9-Dec-2011 4:14 pm
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.
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