BLG wields the axe to halt three-year slump

Barlow Lyde & Gilbert (BLG) is axing partners, radically overhauling its management structure and converting to limited-liability partnership (LLP) status as it struggles to cope with a declining litigation market.

The strategic overhaul will result in BLG bringing in a non-lawyer chief executive officer (CEO) and converting to an LLP before the start of its new financial year in May.

The introduction of a CEO or chief operating officer has been on the table at BLG for at least six months, but internally is regarded as a highly controversial move.

Senior partner Richard Dedman said: “To complain about this because it is a non-fee-earning role is very shortsighted and blinkered, the view of people who think that law firms manage themselves.”

Dedman said that ultimately there had been “overwhelming support” among the partners for bringing in professional management.

One former partner said: “Certainly some of the partners thought it was a ridiculous idea to bring in a non-feeearning manager, who will presumably be on a significant salary, when profits have been stagnant for three years.”

The changes were endorsed at a partnership conference last Thursday (30 November). The moves follow three years during which average profit per equity partner has remained stagnant at £380,000.

Dedman confirmed that market forces had led to a number of partner exits from the firm’s reinsurance group, but he refused to comment further on individuals.

The remainder of the firm’s IT practice quit for Bird & Bird last week, which capped 18 months of departures from the transactional side of the business. These include five TMT partners, three finance partners and one corporate partner.

The LLP conversion is also a big decision. “The only doubt about this is our Hong Kong office as they don’t recognise LLPs,” said Dedman.