UK Law Redundancies Gather Pace
London Correspondent – With the UK economy seemingly stuck in the mud, law firms are looking ahead to another round of belt tightening. With stubbornly high inflation, the persistent hangover that is Brexit, winter on its way and a General Election around the corner, business confidence continues to plummet.
For most large law firms, until now the downturn has been either manageable or, for some, it never arrived at all.
The usual assumption that firms win no matter which way the coin falls appears to have been largely true, with restructuring and insolvency teams flat out, litigation teams ready to pick up the pieces, and antitrust teams saved by the gift that was the National Security and Investment Act with all the work that it has created for them.
But it can’t go on forever, and the UK’s legal market now seems to be entering a phase where the heavy expansion of its workforce during COVID – and on salaries that were unthinkable just a few years ago – cannot be sustained.
M&A teams feed these commercial firms and the firms can only survive on fumes for so long. Law firm layoffs continue in the UK.
And so it is little surprise that the layoffs have begun. Mishcon de Reya, CMS, Trowers & Hamlins, Taylor Rose, Squire Patton Boggs, Weightmans, Reed Smith and Bryan Cave Leighton Paisner are just some of the firms to have commenced redundancy processes in recent weeks.
Coming to these decisions cannot be easy – or at least so one would hope. But for the bigwigs on the 40th floor, there is an unsavoury sense that the decision has arrived at quicker than their double espresso arrives at the boardroom table.
Partners Protecting Jobs
The very clear yardstick is this: Partners will do what needs to be done to protect not only their jobs as Partners, but with it, their healthy drawings from the partnership.
The notable exception to this is Trowers & Hamlins, which has indicated an intention to make five of its six Real Estate / Real Estate Finance Partners redundant. No one likes to see redundancies – but it makes more sense when the hard times fall on everyone.
For the remainder, it is unsurprising and perfectly characteristic of big firms that it is those at the bottom who suffer.
The instinct is to hit the associates or – worse – entire business services and IT departments, well before Partner drawings of £1 million-plus per annum are even in question.
There does not appear to be a moment’s consideration as to whether the Partners themselves could tighten their belts before they throw those just starting out their careers, with hopes, dreams, and mortgages on the scrap heap.
Cries of sympathy fall on deaf ears when intentions are made clear. In the case of CMS, the decision to make 19 staff redundant seems to have been a convenient way to avoid mandatory consultation on the decision – which only kicks in when a proposal impacts 20 staff.
The little stuff that speaks volumes.
It is all eerily reminiscent of the response during the pandemic. Then, Partnerships had no hesitation in making staff redundant while they protected themselves.
It is the perfect reflection of the old adage that shrewd commercial players privatise the profits but socialise the losses when they call the government to bail them out.
Yet again, it is those at the bottom who are being called on to save the day – and with it, to save a few peoples’ hopes for a renovation of the Mayfair or Hampstead pad.