Herbert Smith attributes associate cuts to partnership restructuring
Herbert Smith's announcement this week that it is to cut up to 51 London jobs came as a result of last year's partner restructuring, the firm has confirmed, with the number of roles available for newly-qualified (NQ) lawyers at the firm also set to fall.
May 03, 2012 at 07:03 PM
2 minute read
Herbert Smith's announcement this week that it is to cut up to 51 London jobs came as a result of last year's partner restructuring, the firm has confirmed, with the number of roles available for newly-qualified (NQ) lawyers at the firm also set to fall.
The redundancy round, which will affect more than 3% of the firm's City workforce, will focus largely on junior corporate lawyers, with 23 corporate fee-earners at risk of redundancy after the firm asked around 12 corporate and finance partners to leave at the close of last year.
The partner departures, combined with low associate attrition, have led to "uneven" junior staffing levels, according to managing partner David Willis.
The corporate cuts equate to almost 10% of the London team. A further five fee-earner positions are at risk in real estate, with the remaining job cuts affecting professional support lawyers and personal assistants. The firm is also now expecting to offer jobs to a maximum of 75% of its NQs this autumn, down from retention rates of 80%-90% posted last year.
The firm stated that it has no plans for further redundancies across its international offices or other London practice areas, with finance unaffected despite recent partner cuts, due to a lower number of existing associates in the group.
The redundancies come after the firm's corporate department missed its 2010-11 budget by around £20m, of which around £6m-£8m was written off for a key client believed to be EDF Energy.
Clifford Chance also recently announced London job cuts, with up to 13 finance and capital markets associates at risk, while Linklaters has made a number of back office job cuts in recent months. Allen & Overy and Freshfields Bruckhaus Deringer have both stated they have no redundancy plans.
Herbert Smith is also in the process of rolling out its first wave of cost-cutting measures following a 12-month review of its internal systems by PricewaterhouseCoopers, including centralising its procurement services and launching an international contacts database.
Further changes have been put on hold until merger talks with Australia's Freehills are concluded. The deal is expected to be confirmed by the summer.
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