Several hundred KWM staff made redundant as partners return to offices for clean-up operation

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Several hundred staff at King & Wood Mallesons EUME Services, the holding company for the failed firm’s employees, have been made redundant after the legacy SJ Berwin business filed for administration on Tuesday (17 January).

Confirmation of the job losses came as many of the firm’s former partners returned to the offices to clear up ahead of a Monday (23 January) deadline for removing all remaining client files from the building.

Their return came after the firm’s administrator – Quantuma – raised concerns about confidential client information abandoned in partners’ offices after they had left for other firms. Former partners have now been asked to return to put their offices and closed client files in good order ahead of a deadline for closing the offices at 10 Queen Street Place.

Ashfords head of professional and financial risks, Sam Palmer, who was brought in by Quantuma to manage the billing and collection of remaining files and the allocation of client monies, wrote to all ex-partners to remind them of their ongoing responsibilities with regards to client matters.

They have also been asked to return all electronic devices that may contain confidential information, in order for them to be wiped.

Partners remaining with the small European operation bought out of administration by KWM China have now moved into new City premises at 5 Cheapside.

Around 50 members of staff have been kept on by the joint administrators, Quantuma partners Andrew Hosking and Sean Bucknall, to help with the process of winding down the legacy SJ Berwin business.

The first administrator’s report is due to be filed by 24 January, seven days after the firm entered administration last week.

The collapse represented the end of the line for the legacy SJ Berwin business and the biggest ever UK law firm failure.

The administrators are being co-advised by CMS Cameron McKenna partner Rita Lowe and Steven Cottee of Pinsent Masons.

KWM’s China arm has agreed deals with more than 30 partners to stay on and maintain a Europe and Middle East (EUME) presence for the firm, including seven in London covering corporate, finance and disputes, as well as others in Frankfurt, Dubai and Riyadh.

In an statement to clients shared by the firm on social media yesterday (19 January), KWM’s China leadership team set out what it believes are the reasons for the failure of its EUME arm, as well as the firm’s strategy for rebuilding what is left of its operations across the region.

The email, dated 19 January and signed by the China management committee, references the failure of last October’s recapitalisation plan, which had aimed to bring in £14m from partners and reduce the firm’s debts, which had risen to around £35m.

It states: “Unfortunately, due to a lack of core leadership and a common ground among partners, the recapitalisation plan failed and created a financial crisis at the firm.”

The administrators would not confirm the precise number of staff made redundant.