Top Law Firms Sack 86 Secretaries as Earnings Slide
Robert Verkaik Legal Affairs Correspondent, The Independent (London, England)
TWO OF the world's richest law firms have sacked 86 secretaries in a move that signals the end of record boom times for the legal profession.
Clifford Chance, the world's biggest law firm with a turnover of pounds 1bn, has cut 55 secretarial posts before reporting a slide in profits while one of its main competitors, Allen & Overy, made 31 redundancies just before a similar drop in solicitor earnings.
City law firms have recorded year-on-year increases in turnover and profit in the past five years. But now, faced with a much harsher economic climate, many of the top firms have embarked on spending and cost reviews with some choosing to cut jobs at the lower end of the pay scale.
While secretaries are on salaries of about pounds 25,000, the firm's top partners can command earnings of as much as pounds 1m a year.
Clifford Chance confirmed this month that average earnings per partner for the past year had dropped from pounds 721,000 to pounds 714,000. At Allen & Overy, average earnings fell to less than pounds 700,000, but the firm has confirmed that its most senior partners will still get pounds 1m a year.
Profit and turnover results published this month confirm that the continued global lull in corporate activity has drastically slowed growth of Britain's biggest law firms.
Revenues in 2001-02 showed an average growth of 16.75 per cent, partly boosted by international expansion, against 42.5 per cent the previous year.
Likewise, profitability dropped by an average of 7.75 per cent compared with a rise of 14 per cent in 2000-01.
Cutting secretarial jobs rather than posts occupied by some of the highest- earning partners is not only bad for the firms' images but has an adverse impact on morale.
"Lawyers have close relationships with their secretaries and feel guilty when they are sacked," a senior legal recruitment expert said. "If these firms are cutting costs then they should also be seen to look at the partner deadwood in the higher echelons of the business."
Clifford Chance, which has cut 10 per cent of its secretarial staff, denied that the cuts were linked to what it described as a "marginal" fall in profits. …