Linklaters financial results see firm jump to top of revenue rankings

So was there any need to get rid of around 250 people in London?

I would also be interested in knowing when Linklaters will be publishing details of exactly how many redundancies took place in the London office.

Kate -03 Jul 2009 | 10:44

But..

Highest earning maybe, but now also the least respected by lawyers.

MCT -03 Jul 2009 | 14:49

You mean least respected by ex-Linklaters lawyers. Face it, you didn't make the grade.

Truth be told -03 Jul 2009 | 19:16

Redundancies

A poster above asks: "So was there any need to get rid of around 250 people in London?"

The answer is obvious - YES. Clifford Chance's results show what happens through a failure to take management action (most CC partners admit that their management were far too slow off the mark - CC should have made its cuts 9-12 months before it did). Linklaters would have had the CC problem next year if they hadn't acted.

FF are in a slightly different position because of the much higher percentage of euro billings that they have - they will have issues if the pound appreciates against the euro (query whether that is likely).

The posters having a pop at Links over the redundancies would just be having a pop at collased profits if Simon Davies hadn't acted.

I hear the bonuses at Links were very good this year so if you made the grade their you are doing way better financially than your peers like me at CC.

Conan the Barbarian -04 Jul 2009 | 11:07

Linklaters attempted to demonstrate that its redundancy was "fair" by explaining that it anticipated a reduction in work levels to keep all its associates fully occupied. Their financials demonstrate something quite different. They have pulled in just as much work as in previous years. The slight reduction in profit is due to the cost of the redundancies. The former associates are probably kicking themselves for signing compromise agreements.

RP -06 Jul 2009 | 10:36

To truth be told - I did make the cut and I ask myself how the hell some of my colleagues did... And it isn't just a problem with Linklaters. Friends at other tragic circle firms are saying the same thing. I am a firm believer that redundancy is just a people's game. Certain partners defend certain associates and those not backed then get the boot. There was clearly work coming into Linklaters - that work produced the high revenues. I have no doubt that we will next embark on a recruitment spree to poach good associates who are still at CC and A&O in a bid for total world domination.

Anon -06 Jul 2009 | 11:30

It doesn't take a genius to work out that the lay offs made during this downturn aren't just a reflection of there being less work to do. Firms are taking the opportunity to get rid of the bottom 10%-20% of performers. Amid all the griping and sniping being done by those now out of work, this fact has remained the great unmentionable. We live by the sword, however, so eat it.

Spade namer -06 Jul 2009 | 12:41

Dear Spade - the snag in what you are suggesting (possibly quite rightly) is that Linklaters (and indeed any other law firm which carried out redundancies in such a manner) may have carried out redundancies which are "unfair" and therefore illegal.

Redundancies should be justified on the basis of current and future work levels, not pegged to the perceived quality of associates. Any employer culling the bottom x% should be prepared to get their cheque books out. I agree with the above comment that those who signed compromised agreements should be kicking themselves as they have probably signed away their rights to initiate unfair dismissal claims based on the current financials.

Anon 2 -06 Jul 2009 | 14:00

I find it quite astonishing that people who post to these boards do not understand that there is a distinction between utilisation and profitability. The former (both historic and forecast) should, quite rightly, determine whether or not redundancies are necessary notwithstanding that the latter may be holding up reasonably well. Linklaters is the obvious example. It is absurd to suggest that, just because the firm has remained profitable, this means that they should not have made redundancies. Anyone who believes that keeping on associates who are 50% utilised or less (regardless of the profit being generated by that 50% of work) is a sensible business model for a £1bn+ international law firm clearly has no grasp of basic economics. These firms are not charities, they do not owe everyone a job and, despite what people might like to think (either by ignoring the facts presented or by selectively interpreting the press headlines), cuts are being felt across the board from partner to trainee and the same is happening at Freshfields (see the firm wide restructuring of 2007 that has resulted in their high PEP figures in 07/08 and 08/09). CC sadly missed out on the big restructuring mandates of the last 12 months which have sustained Linklaters and, to a lesser extent, Freshfields (with the latter having been equally buoyed by their Euro account work). I think that CC are putting on a brave face when they claim that 09/10 will be a better year. I suspect that, given the lag between the economic impact on the big corporates and the consequential impact on advisory mandates, firms like Links and Freshfields will be preparing for a tougher year in the next 12 months than the last 12 and this is the reason why redundancies were necessary - they are both well shaped and well positioned to weather the storm. CC, however, are suffering because of their sheer size historically and will continue having to streamline - they will make more redundancies this year - and this will hit the bottom line. If they are in the top 10 by PEP for 09/10 I will be amazed.

Anon -06 Jul 2009 | 14:54

I don't respect Linklaters either.

Not an ex-Linklaters lawyer -07 Jul 2009 | 13:34

As regards the idea of "culling the bottom 10%-20%" - not only would this be unfair dismissal, it's not actually what happens in practice. The reality is that redundancy decisions are made partly on performance and partly on who's done the best job of schmoozing the right partners. I would say the split is about 50-50.

James Norris -07 Jul 2009 | 13:38

I keep reading here about Freshfields and its profitable Euro billing. Yet, I've also heard rumours that Freshfields are not recruiting in Germany in any order of numbers as they did a few years ago.

What's the truth?

Legalbod -08 Jul 2009 | 08:35