Allen & Overy (A&O) has finished consulting on the packages it will be paying to associates who are made redundant, with everyone expected to work at the firm until the end of May to receive the full payout.
According to the firm the pay-outs have been structured to be as tax-efficient as possible, with an associate with one-year’s post qualification experience (PQE) set to receive up to £33,000.
The package is conditional on associates working until the end of May, for which they will be paid. They will also receive two months’ pay in lieu of notice, a minimum of three-and-a-half weeks’ pay for each full year of service with the firm plus a discretionary lump sum ranging from £4,000 to £12,000.
A spokesperson said: “The discussions have been robust, but most importantly open and honest. We’d like to thank the staff representatives for both the effort they have put into the process on behalf of their colleagues and the professional manner in which the discussions have been conducted.”
A three-year PQE associate on a salary of £84,000 would receive: £7,000 for one months’ paid notice, £14,000 for two months in lieu of notice, £5,650 if he or she has been at A&O for one year or less and the same amount for every full additional year.
Including the three-year PQE lump sum payment of around £6,000, this would result in a total payoff of around £32,650. If that three-year PQE associate had been a trainee with the firm, the time element would increase this amount to around £55,250.
The firm will also pay previously earned associate bonuses as a structured redundancy payment and will continue to pay pension contributions during the two months’ paid in lieu of notice.
The spokesperson said: “From the outset we’ve said that we’ve taken the difficult decision to act now from a position of strength, so that we can offer better terms to our departing people than might otherwise be the case. We believe this is reflected in the terms that we’re offering.
“We now move to the remaining tasks of completing the redundancy process and helping all our people through what has been, and continues to be, a difficult time.”