Herbert Smith is to cut up to 84 members of staff from its London office and is also reversing all associate pay bands.
Salaries will be frozen at 2008-09 levels, meaning an associate moving from one year’s post-qualification experience (PQE) to two years’ PQE will remain on £71,000, effectively reversing the bands.
From September newly-qualified lawyers at the firm will see salary levels reduced from £64,000 to £60,000.
Lawyers have also been told this morning that as a consequence of missing targets bonuses and profit sharing schemes will not pay out at the 2008-09 year-end. The firm has instead opted to make a discretionary payment to secretaries and support staff and bonus payments to fee earners on a reduced basis.
The firm said the job cuts would affect 33 people in its corporate practice, with fee-earners, professional support lawyers and paralegals all likely to lose their jobs. The real estate practice will lose up to nine positions while up to 21 secretarial roles across all fee-earning areas and up to 21 support staff will have their positions reviewed.
Managing partner David Willis said the firm was partly protected from the recession because of its strong litigation practice, but added: “It’s the case, however, that many parts of our transactional practice are seeing a significant slowdown, most marked in our London office.
“This is a sad day for the firm but our hope now is that, as part of the consultation exercise, we achieve as much as possible of the proposed reductions through voluntary redundancies and alternative working arrangements.”