Allen & Overy’s (A&O) wide-reaching internal restructuring was triggered by an unexpectedly sharp downturn at the beginning of this year, according to managing partner Wim Dejonghe.
Last week the firm announced ;a ;£44m restructuring that will see it cut 47 partners and 200 fee-earners, spin off its private client business and freeze billing rates at current levels in a direct response to the economic situation (The Lawyer.com, 19 February).
Dejonghe ;said ;the strategy was drawn up as a contingency plan two and a half months ago. The firm decided to put the plan into action on 11 February.
Dejonghe ;said ;the management board had been worried about the economic situation since the beginning of December and realised at the beginning of this month that work levels would not pick up.
“Overall the drop’s across the board, across offices and practice areas. There’s not a single place that’s doing better than last year,” he said.
A&O’s restructuring is the most sweeping in the magic circle to date and constitutes a cull of 9 per cent of global partners, fee-earners and support staff. The London office will bear around half of the cuts.
Around 35 partners will also have their positions on the firm’s 15-year lockstep reviewed.
Partners remaining at the firm are being asked to inject a combined total of £11m at the start of the next financial year. The sum equates to £1,000 per equity partner point.
A&O has also jettisoned its private client team of five partners, which will set up as an independent firm but leave its trainees and associates at A&O.
cf Links redundancy
Dear A&O lawyers, for when the time comes, I suggest you start reading up on the Links redundancy to see how not to do things. If ours is anything to go by, the consultation process will be rushed, the Employee Reps will be appointed by the firm and will be those not prepared to do a good job in case it puts their jobs on the line. Everything will be hush hush and the partners will not provide clear answers on how they arrived at their conclusions.
Good Luck.
A&O redundancies
Dear Telly Tubby, thanks for your good wishes – same to you.
So far so good with the A&O process, the employee reps are going to be elected by the associates and support staff so unless A&O engages in Mugabe-like election fraud (and even I wouldn’t suspect management of that) then we should have a decent say. Whether the reps do a good job remains to be seen, but the firm has already said it’s going to be “generous” to those departing – whatever that means…
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Perhaps they shouldn’t have (over)expanded so much in the first place…
A&O redundancies
A&O´s actions are a mere farce – they get rid of their staff but at the same time they still hire young professionals. Have a look at their website: they praise themselves for caring about their people but quite obviously, they don´t give a damn!