BY:
Caterina Conti
Media Operations
PROJECT COUNSEL MEDIA
17 July 2020 (Paris, France) – If there’s ever a year that a summer holiday has been needed, this is it. But for many the biggest worry is whether there’ll be a job to return to in September after the Government starts scaling back the Job Retention Scheme in August. This is the moment, union leaders warned in June, that could spark a tsunami of job losses and catapult the UK into a disastrous recession. A third of UK Top 50 firms are using the job retention scheme – will this translate to mass-redundancies in the autumn?
I have been plowing through all The Lawyer articles on redundancy, furloughs, etc. plus a few of the web site’s “snapshots-of-the-industry” so herein a few points:
• BCLP became the latest firm to kick off a redundancy consultation last week, putting 40 roles at risk, including 14 fee-earners.
• It followed DWF, which put between 15 and 18 roles in consultation in the UK, while the closure of its international bases in Singapore and Dubai and the downscaling of other outposts, resulted in the departure of 60 people from the business.
• Consultations have also been kickstarted at BLM and Fladgate, while Norton Rose Fulbright has made a ‘small number’ of business service redundancies after it decided to stop using the Government retention scheme at the end of June.
• Law firm leaders across the UK are relying on a range of measures to help them avoid cutting jobs, including delaying quarterly distributions, freezing pay, cancelling bonus awards and delaying NQ start dates. But with economic recovery slower than expected in May are they just delaying the inevitable?
One of their snapshots summarised the situation as follows:
The Top 50 firms bringing people back from furlough – or not
A key paragraph in the snapshot “explainer”:
Of the “UK Top 50 Law Firms”, 35 firms (70 per cent) have made use of the furlough scheme since it was launched in March. The extent of its use varies from firm to firm dependent on the business mix, with no fixed trends emerging. Osborne Clarke, for instance, a well-regarded firm which posted revenue of £209m in 2018/19, had 116 people (28 fee earners and 88 non-fee earners) on furlough as at 13 July, up from 102 (25 fee earners and 77 non fee earners) in June. By contrast, Pinsent Masons (revenues of £423m for 2018/19) reduced the number of people it had on furlough from 146 non fee earners in June to 125 in July.
The piece also indicated that lower down the “UK Top 50 Law Firm” rankings it is the firms with large UK networks and bulky staff bases that have the most reliance on the scheme. And:
BLM, which has suspended quarterly distributions, cut bonuses and launched a redundancy consultation, reduced the number of people it furloughed from 231 (31 fee earners and 200 non-fee earners) in July to 210 in June (27 fee earners and 183 fee earners). Weightmans, which in addition to delaying distributions and freezing pay has put off partner promotions for 2020, currently has 326 people on the scheme (137 fee earners and 189 non fee-earners). And at Irwin Mitchell, where the board has taken a 10 per cent pay cut, around 10 per cent of staff are on furlough – the equivalent of 279 people.
Jamie Driscoll at Deloitte Legal Services (which obviously has a dog in this fight) noted:
For those that remember the 10,000-plus legal industry jobs lost during the last recession, these numbers will seem small fry. Yet, with more and more firms delaying reporting their financials and a slower-than-expected financial recovery, it may not be long before the redundancy trickle turns into a flood. So for those of us that have been expanding our legal services to full offerings … well, we might be able to pick-off some sterling talent.
