A well-known City firm has offered fee-earners and other staff four-day working weeks as the economic outlook for its business deteriorates.

James Holder, managing partner at Charles Russell, said the scheme aims to keep the team together until the market picks up again.

‘There was no compulsion,’ he said. ‘We offered the opportunity to work part-time, with a corresponding drop in salary, and there was a massive take-up. People were being realistic in what are difficult economic times.’

Employment lawyers have called for firms to look at alternatives to redundancies. City firm Denton Wilde Sapte employment partner Richard Nicolle said employees are increasingly ‘thinking outside the box’ and would consider options that were previously unacceptable. ‘Drastic times call for drastic measures,’ he said.

David von Hagen, partner and head of employment law at Westminster firm Winckworth Sherwood, criticised some managers for lacking imagination and giving a ‘muted reception’ to employees who came to them with innovative alternatives to redundancy, such as re-training.

Edward Cooper, employment head at national firm Russell Jones & Walker, warned of the ‘hidden costs of redundancy’ where employees retaining their jobs are demotivated by the treatment of their departed colleagues.

‘Even if there’s not much money around, management should still fund career planning for those who are leaving. It’s important they are seen to have been treated well.’