UK Firms Need Jobs Cuts to Restore Profits

Job cuts
Job cuts are needed if British law firms are going to restore their profitability according to a report from the Royal Bank of Scotland and reported by the FT.

The most successful firms will those who overhaul the traditional model – how often are we hearing that these days? – according to the RBS report.
 Partners are traditionally the most senior lawyers in a firm that take a share of the equity rather than a salary.

In particular, firms that hire contract lawyers or rely more on cheaper paralegals for routine work will benefit, RBS said.

This strategy was exemplified last year by the London office of Quinn Emanuel Urquhart & Sullivan, a US-headquartered firm. Its average profit per equity partner in 2012 stood at £2.5m, one of the highest in the City.

This was partly due to an itinerant team of Russian-speaking temporary staff drafted in to work on the $1bn legal battle between its client Oleg Deripaska and Michael Cherney, which eventually settled confidentially.

“Demand for legal services remains constrained. Accompanied by a continuing level of fee-earner overcapacity relative to the demand for legal services, pressure continues on billing rates, margins and profitability,” said James Tsolakis, RBS’s head of legal services lending.

“Recognising that profit growth is not increasing at the same rate as turnover, the pursuit of higher value instructions combined with effective cost management must be continuing themes driving law firm strategy and future profitability.”

Law firms were hard hit by the financial crisis, which dried up the lucrative pipeline of mergers and acquisitions and banking advice that large City firms had hitherto relied upon. Unprecedented job cuts followed.

At the high-street end of the market, forces such as the liberalisation of the profession, an overhaul of the personal injury market and cuts to the government’s Legal Aid budget have forced changes.

Some smaller solicitors have gone out of business, some are consolidating and some being taken over by larger companies.

Larger firms are also merging, with RBS forecasting more takeovers among domestic firms and internationally as firms pursue growth.

See: The Financial Times


Laughing at Lawyer Depression

http://australia.lawfuel.com

Depression among lawyers is a major issue, but for some Australian lawyers a comic revue has proved so successful in dealing with the issue that they are making a return season, as reported in Australia.Lawfuel.com.

Max Paterson, The Law Revue director and a lawyer at Landers & Rogers, said that the performers weren’t the only ones who were surprised.

 

“Friends and colleagues who supported us were impressed by the professional nature of the show and the standard of comedy on offer,” he said.

 

Last year’s show featured smoking monkey puppets and a bureaucratic plot to outlaw the sun.

 

The random series of sketches not only drew belly laughs, they also drew a crowd.

 

The event raised $10,000 for the Tristan Jepson Memorial Foundation (TJMF), which is about to launch a set of voluntary industry guidelines that help firms and other organisations improve psychological health and safety in the workplace.

Paterson revealed that this year’s audience could expect an equally absurd “grab bag” of sketches that “poke fun of everyone and anyone”, with a few cerebral moments in between.

 

 

The performers include lawyers from K&L Gates, Ashurst, Minter Ellison, an ASIC investigator and a handful of judge’s associates.

 

Paterson said the eclectic ensemble has a few fresh faces that were selected from around 40 lawyers who auditioned for the 2014 production.

LawFuel Australia

 

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