Macfarlanes feels the heat” />When Macfarlanes revealed it would be laying off up to 14 staff this week, perhaps the only surprise was that the announcement hadn’t come sooner (see story).
The firm had always seemed a likely candidate for cuts. Not only has its corporate practice been hard hit by the credit crunch, but it has a significant real estate practice, which still makes up around a fifth of its £110m revenue.
Tellingly, all the lawyer redundancies (seven in total) will be in the property group, adding to the scores of real estate lawyers already on the job market.
Speaking of property, Macfarlanes opened a new office for client meetings earlier this year and is currently refitting its lawyer offices on Norwich Street.
Even for such a profitable firm, this is an unwelcome cost during a difficult period for both its main practices.
Senior partner Charles Martin insists the firm did not have to take on finance to pay for the office facelift, which was fully paid for in the 2006-07 financial year.
But the fact remains that Macfarlanes, with PEP of more than £1m, must be facing a pretty severe drop in profits if it has been forced to lose lawyers. The scale of the redundancy programme is unprecedented – the last time it made cuts was in the early nineties and that was only a handful.
“Our partners have taken a considerable amount of pain,” admits Martin. They could take even more before the economy recovers.