Time is money. Or at least, it is for the staff at Linklaters.
The firm will slash up to 270 jobs in London as part of a strategic programme dubbed ‘Project New World’. The redundancy payments these people receive will be based on time. Those leaving will get three weeks’ pay for each year worked at the firm, in addition to a payment equivalent to three months’ salary.
The scheme is similar to that employed by banks and is triple the statutory minimum, which works out at one week for every year employed.
But the move has sparked yet more controversy at a time when Linklaters has had its fill of news coverage.
One anonymous poster on The Lawyer.com said: “Somehow I don’t think Linklaters got its strategy right with the redundancy pay they are offering.
Three weeks’ pay for each year worked – are we supposed to be grateful?”
The ;next-biggest ;redundancy consultation in the City is happening at Clifford Chance’s Canary Wharf office. The firm is consulting with more or less everyone, announcing plans for partnership cuts and talks with 880 associates.
The emphasis at Clifford Chance, though, is on months rather than weeks. Clifford Chance is offering its associates the same three months’ notice as Linklaters, but with an extra two months’ salary as a payoff.
It is understood that associate representatives are negotiating a bigger package, with the aim of securing a payout of four, rather than two, months’ salary. It is understood that an additional lump sum is being offered depending on years worked at the firm, but Clifford Chance declined to comment on the details.
Just as the salary and bonus packages for associates are similar at the magic circle firms, the redundancy packages at each work out to be roughly the same (see box).
Slimming down the partnership is trickier and more expensive than cutting associate numbers. Packages are generally tailored for the individual partners, negotiated with the managing partner or board members, and the trend is for smaller payouts.
A few years ago partners could expect up to 24 months’ worth of profit share, but now the standard payout is between nine and 12 months, thanks to management toughening their style.
By these figures, the average equity partner at Clifford Chance could expect a minimum of around £877,500, while the same calculation yields just over £1m at Linklaters.
Roderick ;I’Anson ;Banks, ;a partnership litigation specialist at 48 Bedford Row, told The Lawyer that different rules could apply to fixed-share or salaried partners, depending on the partnership deed. “Some are partners in law, but some may well find that, in the partnership agreement, the management can get rid of them in the same way as an employee,” he said.
Time is even more of an issue with partners. While management might prefer partners to leave the firm quickly and quietly with a wad of cash, the partners themselves may try to negotiate a period of six months’ grace, during which time they can try to find new jobs.
I’Anson Banks advises partners to try to stave off their leaving date for as long as possible. “A partner’s chances of getting a new job diminishes when they’re walking the streets as opposed to working in an office,” he emphasised.
Time and money were sought-after commodities during the boom, but are now invaluable. And they will be the subject of tense negotiations during the redundancy talks at both Clifford Chance and Linklaters.