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Magic circle firm wields axe on property partners as corporate dominance takes hold.
Linklaters has moved to de-equitise partners for the first time as part of a strategy to streamline the firm. Those partners affected are in the real estate and construction departments, where growth has been frozen in favour of a general push into corporate and finance.
A Linklaters source confirmed that two partners in real estate and construction had been affected. However, several sources familiar with the situation claimed that up to four more partners are looking for new positions rather than face the de-equitisation process.
The Linklaters source said that, although they were partly driven by underperformance, the cuts were essentially strategic. Last September The Lawyer revealed that Linklaters was to focus on corporate and finance at the expense of future investment in real estate and litigation.
The construction department was also merged with real estate and projects in January in a bid to refocus on high-end clients and improve the bottom line.
Several other City firms, including Berwin Leighton Paisner (see page 3) and Lovells, have recently de-equitised partners to improve profitability.
Meanwhile, Linklaters has completed its firmwide review of staffing levels, with the EU and competition department being one of the last to undergo management scrutiny. The group is the only one within the corporate department to be aggressively downsized.
Last year Linklaters embarked on a staff review, claiming that attrition rates had fallen because of the downturn in the economy. Aiming for a staff turnover of around 20 per cent, the firm began to manage people out more aggressively, although it did not resort to a formal redundancy process.
The competition department, which is heavily reliant on M&A work, was one of the last to be targeted. Around 80 per cent of the group's work is understood to be for corporate clients. A group of assistants left in the summer, with a further five going at the end of the year.
Several sources told The Lawyer that as many as 10 of the assistants were pushed out, although a source at Linklaters indicated that the number who were managed out was just three.
Between May 2002 and last Friday (21 March), however, numbers in the group fell by around 15 per cent. In May there were 27 assistants and last week 23. Linklaters did not comment by the time of going to press.