The UK Law Private Equity Pinch
Jacqui Coombe, LawFuel contributor
In the latest episode of “When Private Equity Buys Your Law Firm,” DWF is showing over 100 staff members the door marked “consultation” – a corporate euphemism we all know precedes the actual exit sign.
The top-25 UK firm has launched a redundancy consultation affecting 108 employees which is approximately 2 percent of its workforce – spanning both fee-earning lawyers and support staff.
The Corporate Surgery Begins
Just two years after being acquired by private equity outfit Inflexion following its tumultuous four-year stint as a publicly listed company, DWF appears to be trimming the fat while talking up growth.
It’s the classic private equity playbook: buy it, squeeze it, flip it – though it seems as if they’d prefer we call it “optimizing operational efficiencies.”
The firm’s spokesperson deployed the standard corporate reassurance package: “Our strategy is to achieve long-term, sustainable growth… ensuring our teams reflect the changing needs of our clients”1. Translation: “Some of you won’t be joining us on this exciting journey.”
The Pink Slip Paradox
What makes this particularly interesting is the timing. DWF recently reported a 14 percent increase in net revenue to £435m. Nothing says “celebrating success” quite like showing 100+ people the door while revenue soars.
According to insiders, affected employees were informed via lightning-fast remote meetings and the redundancy package is reportedly “more or less just the statutory minimum”. Some staff claim they’ve been “left without updates and answers to their questions for weeks”.
When Inflexion acquired DWF, they promised an “organic and acquisitive growth journey”1. Seems like the journey includes some forced departures along the way.
So, how exactly does a firm that’s raking in more money decide that letting go of a 100 staff is the next best move? Is growth always synonymous with cuts? Honestly curious what the folks at LawFuel Editors think about this.
Sometimes, companies trim workforce to streamline operations and improve profitability long-term. It’s not always about current profits but about efficiency and future positioning.
Also worth noting, sometimes these decisions are more about pleasing shareholders or setting up for strategic moves. Not always straightforward.
Remarkable how DWF’s story illustrates the classic private equity playbook. Increase in revenue doesn’t always protect you from the cost-cutting strategies these firms love. Sad to see so many jobs in jeopardy.
Isn’t it a bit early to judge the long-term impact of these layoffs on DWF’s growth trajectory? These moves could be preemptive measures to avoid larger issues down the line.
Preemptive or not, it’s the staff who bear the brunt. The long-term ‘benefits’ often seem to favor shareholders over employees.
when private equity comes knocking, it’s more than doors that start to rocking. here’s to hoping dwf finds its way, lest more staff are sent astray. 🍊
LawFuel Editors, could we get more insight into the decision-making process behind this move by DWF? It’d be beneficial to understand the metrics and analysis used to justify such a significant reduction in staff.