Megafirm Clifford Chance to Reduce Partner Ranks
Clifford Chance, the world’s largest law firm measured by revenue, is planning to eliminate an undetermined number of partners from its ranks and, as previously reported, is asking those remaining at the firm to contribute 150,000 pounds (about $217,000 in U.S. dollars).
In a written statement today, global managing partner David Childs said the elite London-based “magic-circle” firm will soon determine which partners to cut, as it reconfigures to deal with the global economic downturn that has hit some of its key banking clients hard, according to Bloomberg.
Although no exact numbers are given by the firm, news reports say Clifford Chance anticipates a major restructuring of its partnership. The request for capital contributions was announced earlier, as discussed in a previous ABAJournal.com post.
“The partnership will be asked to vote on the proposal in just over a month’s time and, while no exact numbers have been discussed at this stage, both salaried and equity partners will be asked to leave the firm,” writes the Lawyer. Childs says he is confident the proposal will be adopted, the article notes.
Although it is possible that some partners could be kept on in nonpartner positions, this isn’t likely to occur, as far as most partners are concerned, because the approach would be contrary to the firm’s lockstep seniority and compensation structure, according to Childs.
In a written statement sent to ABAJournal.com by the law firm, Childs elaborates further: “The most successful organizations are those that adapt and evolve and that is what we are doing. To achieve the firm’s strategic objectives we need to reflect the changes we see in our clients’ businesses today and invest in those areas that we believe will be important to them and to us tomorrow.”
Clifford Chance also says in the statement that its “proposal to review the shape and size of the firm’s partnership,” in order to “ensure the firm has the right structure for achieving its long-term strategic goals as well as for meeting evolving client needs,” if approved by the partnership, “is likely to result in an overall reduction in partner numbers.”
According to the the London Times, “Clifford Chance, which has about 650 partners and 3,300 salaried lawyers, had already cut up to 80 junior fee-earners from its London office in response to the upheaval caused by the financial crisis.”
The move by Clifford Chance follows widespread reports of layoffs at many law firms in the U.S. and U.K., as well as a similar plan to raise capital announced last year by DLA Piper.
Updated at 12:15 a.m. on Feb. 6 to include information provided by the firm in a written statement.
