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A&O confirms up to 155 London layoffs ahead of Belfast launch
@Anonymous | 5-May-2011 10:46 pm
'As an A&O client I will await details on how they plan to pass on the cost savings'
There is no way on Earth clients will see any extra cost savings from this - not this year anyway. The plan is to reduce the costs to A&O of agreeing to lower rates for process work that clients have already demanded.
Many City firms now accept they have no choice but to reduce rates on commoditized work, but if they don't cut their own costs it will mean a nasty erosion of PEP - which they are not going to let happen - hence Belfast.
The interesting battle will now be to see which firms can still own the process work while providing it at the cheapest cost to themselves - (and without the standard getting so low the clients start to notice.)
It's the beginning of a new phase for City law firms: with price pressure steadily increasing on process fees. We may even see that in five years' time process work fees are considerably lower than they are today. Sounds crazy in the legal world, but this retail price erosion/battle to reduce wholseale production costs is how the rest of the economy works.
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