It was the west coast US firms that kicked off the salary war that spread across the states and into the UK. So are the cuts now being made by these same firms a sign of things to come?
According to this week's Big Question survey of 100 leading solicitors, nearly one in three firms (29%) are considering taking action to cope with the economic slowdown. But the silver lining for nervous assistant solicitors is that although our panel is coy about exactly what their firms are planning to do, the survey uncovers a marked reluctance to sack assistants.
While just under a quarter of the panel (24%) agreed with the statement that firing junior lawyers in tougher times was 'accepting reality', 57% described it only as a 'last resort in difficult times'. And 19% said it was 'short sighted and should be avoided at all costs'.
Allen & Overy telecoms partner Chris Watson says he is probably in the 'last resort' camp – and adds that his firm is determined to take a long view on the value of its assistants. "Those firms that jumped to make redundancies in the last recession really regretted it," he says.
The panel was reluctant to identify where savings could be made in the event of a downturn with 85% opting for a combination of factors. But cutting salaries is definitely out for our panel – nobody voted for that option – while removing under-performing partners was just slightly more popular than firing assistant solicitors (5% and 4% respectively).
But while the panel may balk at instigating cost-cutting measures, the vast majority are reluctant to countenance falls in partner profits. Watson says he would be prepared to see profits fall if it meant keeping good people on. Charles Martin of Macfarlanes agrees and says partners cannot expect profits to rise inexorably whatever the state of the market. However, he says it is far too early to talk about job cuts.
"It is true some Silicon Valley firms have made job cuts, but the bottom fell out of that market over a year ago. There has been a significant lead time before these cuts," Martin says.
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