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Herbert Smith plans to cut its London headcount by around 51, with corporate heaviest hit, as it embarks on a redundancy consultation.
The firm told staff today that it would begin a 30-day consultation aimed at cutting around 3.2 per cent of London staff headcount, the equivalent of 51 people.
According to the firm, the corporate practice will bear the brunt of the cuts, with up to 23 fee-earners set to go. Up to 19 legal PAs are also at risk, as are five fee-earners in the real estate practice.
In a statement, Herbert Smith managing partner David Willis said: “We need to ensure our London office resources are in step with current and anticipated work levels, and allow us to deliver a level of performance consistent with our strategic goals.
“It’s been a difficult decision which we’ve taken reluctantly and after much deliberation. We’ve waited in the hope that conditions in transactional markets would improve - but against a backdrop of continuing uncertainties in these markets, we believe now’s the right time to address the issue.
“This is about avoiding undue growth in our numbers. In the current economic climate, inevitably far fewer of our staff are choosing to move on. While we’re proposing a reduction in current London fee-earner numbers for corporate and real estate, in real terms - taking account of trainees qualifying later this year- this will not result in a reduction in the overall number of associates in our London office in either of these practices over the next 12 months.
“We recognise the next few weeks will be an unsettling period for our staff and a key priority for us will be to support them throughout this exercise.”
The consultation will begin next week when management and the staff representatives will discuss redundancy packages. According to a Herbert Smith spokesperson, the firm will try to encourage voluntary redundancies by offering enhanced packages to those who leave of their own accord, though the firm could not yet comment on what the packages might entail.
Herbert Smith last held a redundancy consultation in 2009 (26 May 2009). The firm cut 84 staff in London with those leaving taking voluntary redundancy.
In September 2011, The Lawyer reported that the firm was taking a close look at its corporate department after the team missed its budget target by £20m (7 September 2011), though at the time global corporate head James Palmer denied any cuts were in the pipeline.