Wednesday, January 14, 2009

London Burning - UK Law Firm Redundancies

The Lawyer magazine has published their list of firms' redundancy numbers (including those in consultation). The number is a frightening 2,209. Keep in mind though that this number is for the entire year of 2008, and not a number from the past month or two.

We're not sure how accurate these figures are; however after spending the majority of the final quarter of 2008 in London, we can assure all that it is not the city to be in. See
here for the chart.

Of those on the list, Clifford Chance has been the most talked about in the media, and also the most open with the press and staff about their intentions. The current number of non-partner fee earners up for consultation is quoted at 880. Support staff numbers are set to be announced within weeks.

Although the fear is in the City that other major firms will follow close on the heels of Clifford Chance with lawyer redundancies, Legal Week magazine has run with an article which states that few will be doing so immediately. See
here for the story.

The Clifford Chance news is in addition to the firm calling in some GBP60 million of capital from partners (an average of GBP150,000 per partner), and this week announcing a potential profit fall of 30%. Such a fall will once again take the average PPEP down to under the GBP1 million level (not seen since 2005-06 when the average PPEP was down to a non-magic GBP810,000 level).

Cadwalader's London office is also not a happy place, with news today that seven London partners walked out the doors this week. Expect more tragic tales of loss in the coming weeks and months from others in the City.

Obviously it is not all doom and gloom - the loss of many high street retailers has created more work than some practice groups can handle.

Ashurst is the most recent of firm to announce a recent win in this area after furniture retailer Land of Leather fell into administration. Takeover related business is also set to start kicking in as the cashed up sharks circle the poorly performing and injured businesses across Europe. Both Freshfields and Norton Rose have witnessed this first hand with the GBP8.5 billion takeover of Dutch utility company Essent by German rival RWE.

...and of course there is always one person with a
smile no matter what happens.

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