It’s starting to look like we have entered the realms of competitive restructuring. Clifford Chance starts with a redundancy and capital call, Linklaters throws a partnership restructuring into the mix and then Freshfields comes up with a salary freeze. So Allen & Overy’s (A&O’s) options to go one better looked somewhat limited, but they managed it by matching all of the above and raising it with a freeze in billing rates at 2008 levels (we’ll get to that later), hiving off private client and reviewing the positions of 35 equity partners. Short of shutting the banking practice, there wasn’t much left on the table.
It has to be said that in terms of candour, A&O sailed a touch close to the wind on this one. While rightly being careful to avoid pretending that cuts were being ruled out after news of the Hong Kong restructuring emerged, the firm avoided questions regarding specific claims that were put to it relating to a partnership restructuring (three weeks ago), a formal redundancy programme (two weeks ago), and a pay freeze (last week). Set against that, A&O was admirably forthcoming when it came to announcing the full details yesterday and, obviously, it’s very difficult to be open when such sensitive internal issues are under consideration.
