Professional firms everywhere are responding to pressures created by the recession. Very recently we have observed firms becoming open and honest about both the lack of sufficient work to keep their lawyers busy and the extent of partner and staff cuts. Allen & Overy is the latest magic circle law firm to offer full explanations when announcing radical headcount reductions.
Cynics suggest that the motivation for the current wave of redundancies is simply a desire to maintain average profits per partner. In our experience of advising law firms, nothing could be further from the truth. Faced with turmoil in global markets and a dramatic reduction in the demand for legal services, firms embark on reductions in force with great reluctance and in the hope of safeguarding the long-term future of the firm’s business.
