Partners predict a wave of lawyer redundancies will follow the large-scale support staff culls announced by a number of firms in recent weeks. 

Legal Week's Big Question survey, carried out in the wake of UK support staff redundancies at firms including DLA Piper, Norton Rose Fulbright and Dentons, has found that 57% of partners expect to see lawyer job cuts at major UK firms during the coming year.

The survey, which canvassed the opinions of around 150 partners, also found that 83% of respondents believe there will be further non-legal job cuts during the next six months.

Eleven percent of those taking part believe lawyer redundancies are extremely likely, with a further 46% believing them to be quite likely. In contrast only 5% believe lawyer cuts are extremely unlikely.

Additionally, almost two-thirds of respondents (61%) think more support staff cuts are likely during the coming six months, with 22% fearing this is very likely.

Looking across support and legal roles, almost half (42%) of the respondents believe most of the cuts will be in London, with 32% believing regional UK offices will be more affected and 26% worried about international networks. 

The research findings come after it emerged that Norton Rose Fulbright and Dentons plan to cut 60 and 50 UK back-office jobs respectively, while DLA Piper has laid out plans to cut up to 200 UK support jobs – the equivalent of up to 18% of its UK staff. 

Both DLA Piper and Dentons plan to outsource jobs to Warsaw, while Norton Rose is set to open a support centre in Manila in September. In addition, King & Wood Mallesons has laid off 37 London support staff and secretaries.

Brexit impact

The cuts come against a backdrop of increasingly uncertain market conditions, with respondents citing fears over Brexit and generally tough economic conditions as possible drivers for the redundancies.

Susan Bright, Hogan Lovells

Susan Bright, Hogan Lovells' UK and Africa managing partner, suggests the cuts simply reflect cost pressures on law firms. "People will be looking at costs and efficiencies as one would expect every business to do," she says.

Some respondents though, believe that a vote for the UK to leave the European Union in the upcoming referendum would worsen market conditions, triggering a fresh wave of layoffs.

Pinsent Masons managing partner, John Cleland, sums up the uncertainty that Brexit has created: "One of the challenges in the current environment is that the 2016-17 financial year is almost impossible to plan for. I've no doubt many firms would – if given the option – prefer to set their budgets after the outcome of the Brexit referendum is known."

Given this, most of those surveyed took a cautious view of the next financial year, with 42% predicting that firms will grow by between one and five percent and 36% thinking that revenue will remain static at most firms.

One partner, who chose to remain anonymous, says: "Whatever the outcome of the referendum, there are significant headwinds facing the economy over the next 12 months."

New worlds

Others argue the cuts are a sign of the more fundamental shift that is taking place in the profession, as globalisation and technological change wreak havoc on existing business models.

Bright says: "We live in a global world where the technology exists for companies to be more agile and do things from different places."

Many firms have already been through this process. For example, magic circle firm Clifford Chance moved 300 support staff jobs to India in 2006 and its Delhi service centre now accounts for 20% of its non-secretarial support staff.

Eversheds chief operating officer, Kathryn Fleming, says that offshoring "is topical but far from new", adding  that "Eversheds' offshore elements are now bedded in".

Jeremy Cohen, Dentons

Jeremy Cohen, Dentons UKMEA CEO, maintains that it will primarily be only the largest global firms outsourcing jobs, as they are the only firms with the economies of scale to make such moves viable.

"Global firms," he says, "have the scale to make the investments to do this type of thing, and the nature of the global business means it makes sense. I don't know whether that will be true of the whole legal profession – for some it won't make sense to do it in this way because they won't have the scale to manage it."

Artificial intelligence and automation could have as much impact on jobs and law firm structures in the future as outsourcing has to date, by cutting down the man hours needed to complete routine tasks. DLA, for example, ascribed some of its projected job losses to the increased use of technology for carrying out administrative tasks.

However, Fleming argues that automation, while a new frontier for firms, shouldn't necessarily lead to job losses

"I don't believe that automation necessarily leads to a reduction in legal staff but it will influence how they spend their time. Automation should be a liberator and enable lawyers [to spend] more time with clients and less time wading through the papers or admin associated with our profession."

Reputational risk?

Despite numerous firms making redundancies since the financial crisis, respondents to the survey still argue that support staff cuts have a negative impact on firms' reputations.

Seventy one percent of partners said making redundancies had a negative impact on firms' reputations, while 29% said it was just a normal part of doing business.

Cohen maintains that outsourcing jobs is no longer a detrimental decision from a reputational standpoint "now that it's well understood why people are doing it". He adds: "I don't think people think firms are good guys or bad guys for doing it."

Part of the problem here, according to respondents, is how firms handle redundancies. Only 30% said that commercial law firms generally handle job cuts well in terms of fairness and communication, while 59% said the process could be hit and miss, with 11% arguing the process is generally poorly handled.

Given the fears over the state of the market and the constant demand to boost profits, firms should take the time now to ensure they have the right processes in place, should they need to make cuts in future.

As Cleland points out: "It is a difficult balance. While clients don't – and should not – pay for operational inefficiency among their advisers, nor do they want to see the quality of product compromised as a result of cost-cutting."

Other key findings from the research:

37% – percentage of respondents believing support cuts at their firm are likely in the next six months.

16% – percentage believing it likely that their firm will make lawyers redundant in the next six months.