Legal News

Black Thursday, Redux? Allen & Overy to Trim Partner Headcount by 9%

By Dan Slater

What is it with Thursdays and layoffs? Last week, Above the Law pegged the two-day carnage at 828 BigLaw lawyers and staff members, leading us to question whether it was the worst day ever for big law firms.

That said, at the time, it seemed pretty clear that more layoffs were likely on their way. Law-firm consultant Peter Zeughauser rang a note of doom to the Recorder: “There will be more. Materially more. I’m aware of some big ones coming up.”

Here’s a big one: Today, Legal Week reports that Allen & Overy has announced “a sweeping restructuring” that includes the following:

• As many as 47 partners are expected to decamp the firm by April.
• A further 35 partners are expected to see their allocations in the equity reviewed. Legal Week reports that half of these 35 could be demoted to salaried partner status.
• Associate headcount is set to be reduced by around 200.
• Around 200 support jobs are also set to go.
• A&O will ask equity partners to inject an average of £30,000 of fresh capital, based on a £1,000 per equity point scale. (For more on this trend, see a recent article by the LB’s Ashby Jones.)

In an internal memo, A&O senior partner David Morley and managing partner Wim Dejonghe said: “We have taken great steps to avoid half measures at this stage to try to reduce the likelihood of any further, similar proposed action. . . .We must act decisively to get the business to the right size, with the right skills in the right places.”

Full post as published by Law Blog - WSJ.com on February 19, 2009 (boomark / email).