A&O asks up to 3% of equity to go as partnership management resumes

Allen & Overy (A&O) has asked a small number of equity partners to leave the partnership after restarting its annual lockstep management for the first time since a partner cull carried out in the wake of the 2008 financial crisis.

The magic circle firm said the move – expected to affect between 1% and 3% of equity partners – was not a restructuring and marked a return to “normal rates” of partnership management.

This slowed down following A&O’s decision to cull 9% of its partnership during the 2008-09 financial year as a result of the credit crunch and a resultant slowdown in activity levels.

A&O said the latest cuts are not practice group specific and will be spread across the firm.

Managing partner Wim Dejonghe said: “In a lockstep model there is always a bit of partnership management, with 1-3% per year the normal rate. After a restructuring this dies down for a while. There is nothing happening now but the normal levels of partners coming in and going out.”

A&O’s 2008-09 restructuring saw the firm cull 9% of all partners, associates and support staff globally, paying out £44m in total to departing staff.

A&O is also set to shell out £3m in redundancy costs relating to the launch of its back office support centre in Belfast, which officially launched earlier this month. The launch has led to the loss of 155 back office jobs from A&O’s City headquarters.

Last week (25 November) Legal Week reported that one of A&O’s best known corporate partners, Alan Paul, is set to leave the firm at the end of this financial year (30 April). Paul, who has acted on many of the firm’s high profile corporate and private equity deals during his 26 years’ as a partner, has yet to decide on his next move. He has said it may or may not be within the law but confirmed he does not plan to join the partnership of a rival firm.