Allen & Overy (A&O) is set to receive £2.5m of public funding in return for creating 300 new jobs in Belfast.

The magic circle firm will receive the funds from Invest Northern Ireland (NI) after applying to the body ahead of this week's announcement that it is to launch a business and legal support centre in Belfast later this year.

The £2.5m sum is based on the number of job opportunities created in the local market, with news of the funding coming as it emerged that Invest NI has offered Herbert Smith £208,000 of support towards its Belfast operation, which will create 26 jobs and generate total annual salaries of £650,000.

A&O announced earlier this week (2 February) that is opening an operational support and legal services centre in Belfast that is expected to grow to 300 members of staff by 2014.

The initiative announced to staff internally that day, will see the creation of a new Support Services Centre delivering some core internal business support processes, as well as a Legal Services Centre (LSC) delivering some routine elements of legal work.

The City giant expects to have as many as 300 staff based in Belfast by 2014 and is to begin consulting on proposals to transfer 180 roles from London by the autumn.

The total of 180 roles translates to 18% of A&O's total support function in London.

The 90-day consultation process will commence with London support staff shortly to determine which roles will transfer to Belfast, but the firm said there would be no lawyer redundancies as a result of the announcement. Any fee-earning roles at the new office will be newly-created.

Some support service processes such as elements of IT, HR, finance, business services and library will be delivered from the new office.

The majority of staff in Belfast are expected to join in phases over the first 15 months as core support processes transfer from London. Relocation packages will be offered to all with the intention of minimising job losses. No staff will be required to leave or relocate before the office is operational in the autumn.

The firm is also in the process of selecting an internal candidate to head up the office.

A&O managing partner Wim Dejonghe (pictured) commented: "This announcement follows a review of our support services in London. These proposals are about reshaping the firm for the future and asking ourselves: 'Are we operating in the most efficient and cost effective way possible?'

"Unfortunately this involves taking some tough decisions and looking at both what our competitors are doing and what our clients expect us to do. That's why it is not a decision we've taken lightly and we understand that our proposals will come as a surprise and be upsetting for those staff whose roles are potentially affected. We will do everything we can to support those staff and are committed to treating them professionally and sensitively.

"The reality is that the way global legal services are being delivered is changing. We have to meet that challenge and proactively offer increased efficiencies and alternative resourcing to our clients, but with the reassurance and quality they expect from A&O."

The move comes after Herbert Smith last year announced an initiative to set up a support centre in Belfast to handle support work in litigation. The office is to launch in April.

A&O said that Northern Ireland was particularly attractive due to its strong education system and quality of investment incentives.

For more analysis, see Editors blog: A&O's hard facts of life, and Heal thyself – law firms will remake themselves for the age.

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