City firm Herbert Smith will cut up to 84 London staff and freeze salaries across its London office, the firm announced today (20 April). Up to 30 fee-earners will be made redundant as part of the cuts, while the pay freeze, which comes in to force in September, will affect all staff except trainees. From September, lawyers qualifying at the firm will be paid £60,000 rather than £66,000.

Up to 24 fee-earners and professional support lawyers will be made redundant in the firm’s corporate practice; up to nine fee-earners and professional support lawyers will be axed in its real estate practice; up to nine paralegals in its corporate practice will lose their jobs; and up to 21 secretarial and 21 support staff jobs will be lost. Herbert Smith said it made the decision to cut staff following a review of resources ahead of the firm's financial year-end of 30 April. The firm has around 2,200 staff, including 1,300 fee-earners, and had a turnover of £420m last year. The firm said its London office is not expected to meet its bonus targets, but will make discretionary payments to secretaries and support staff and reduced bonus payments to fee-earners.

In a statement, managing partner David Willis said: ‘We now have a more informed view of the likely impact in the medium term of a sustained and global downturn on our business. From this we have concluded that our current resourcing levels in London are out of step with the work the office can expect to secure.

‘We believe the impact will be mitigated by the strength of our disputes practice and by our international offices continuing to perform strongly. It is the case however that many parts of our transactional practice are seeing a significant slowdown, most marked in our London office.

‘This is a sad day for the firm but our hope now is that, as part of the consultation exercise, we achieve as much as possible of the proposed reductions through voluntary redundancies and alternative working arrangements.

‘We acknowledge this will be a difficult and unsettling period for all our staff. We will do all that we can to support each of them throughout this process.’