Reed Smith cuts 45 lawyer jobs in restructure

Topics: Law firm & practice management,City

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International firm Reed Smith has cut 45 lawyer roles from its offices across the US, Europe and the Middle East, as it restructures the business in order to remain competitive.

The restructure of its legal and non-legal staff follows a review of its staffing model to assess how the firm could provide legal services in the ‘most efficient manner’.

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Reed Smith said the restructure has reduced its global headcount of 1,650 lawyers by 2.5%, and reduced non-legal headcount by the same percentage. It did not specify how many lawyers were cut from each office.

The firm has 27 offices across US, Europe, the Middle East and Asia. Its offices in Asia were unaffected by the cuts.

The firm said that the restructure has come as the legal industry experiences a ‘fundamental shift’ in the nature of the demand for, and the delivery of, legal services in recent years.

It said that the adjustments were needed to ensure the firm remains competitive in the face of industry changes and fluctuations in market demand.

A spokesperson for Reed Smith said: ‘The decision to restructure was difficult, particularly because it impacts individuals who have made meaningful and positive contributions to our firm and our clients. We are providing them with resources, including severance pay and professional job-transition advisory support, to help them through this period.’

In its last published results, for the year ended 31 December 2014, Reed Smith posted an 11% rise in net profits to £64.9m, which it attributed to its approach to global industries.

Readers' comments (6)

  • An 11% rise in profits, but 45 lawyers get the sack, or as RS would no doubt say, are "let go". You're all heart! How do they pay the mortgage, feed their families and all the rest of it? And what does "professional job transition advisory support" mean in practice? I'll tell you what it means "here's the address of the local job centre".

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  • David, you are old enough, long enough in the tooth and presumably commercially astute enough to know that the exigencies of running a law firm does not take into consideration the personal circumstances or considerations of its staff and that a rise in profit one financial year does not always connote a sound business structure. Unfortunately, nowadays, considerations are very different and firms have to remain keenly aware of market forces and the commercial pressures of competition. We have seen too many firms going by the wayside lately with a massive £300m+ creditors over the past year whistling in the wind with all but 2p in the £ to console them if they are lucky!

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  • So last year, Anon, £64.9m...and you sack those who make it for you? I call that shooting yourself in the foot. Assuming there are, say, 100 partners that means £649,000 per partner. Well, I could easily get by on that. And if those 100 were to accept £500,000 p a that would leave £149,000 x 100 = £14,900,000 to keep on the 45. And if the partners' stoppages were 50% that would only cost them£75,000 anyway.

    And who is to do the work done the 45? I shall give you a clue, it won't be the partners. It will be the remaining employees who in due course will themselves be culled if they do not make an impossible sum next year. The moral seems to be, if you're in a gold mine keep digging.

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  • David, maybe they let go people who were not very productive. In large firms you can have some staff that get away with lazy practices. We've had them come to us, they've been bloody useless and being a smaller firm we spotted this quickly. BP gets rid of the bottom 5%? Of staff every year.

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  • Yes, Anon, 10.24, I see your point. But how do they asses this, by bills delivered, bills paid, or how? I used to pay my employees a small salary plus a percentage of what they brought in, i e bills paid. They soon learned not only to bill well and promptly, but also to get those bills paid promptly too. Their income depended on it after all.

    So too did mine!

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  • David,

    Did your staff also have to bring their own work in?

    If so, exactly like a miner having to find the coal, dig it out, sell it, and give most of the profit to the mine owner. This has been a constant problem with the solicitors profession. Assistants, as with all employees, sell their skilled labour as lawyers first and foremost, not their marketing ability.
    Great if they can get work in, but many who are good lawyers simply cannot, because often those skills are entirely contradictory.
    Finders, minders, and grinders used to be the phrase, all were needed.

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