News

KWM has stopped paying some of its staff

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Affected include those on maternity leave

kingwoodmallesons

King & Wood Mallesons (KWM) is refusing to comment on a report that it has stopped paying 100 members of staff as the firm prepares to go into administration.

According to a story in Legal Business Magazine this morning, the UK and European arm of KWM — which is £30 million in debt — notified employees of the decision not to pay them yesterday on their first day back after the Christmas break.

The unlucky 100 include some lawyers, but are mostly in business services. Some of them are currently on maternity leave, while others are off sick or taking holiday. It is understood that they were selected after an informal consultation. Those affected continue to be employed by the firm.

Responding to the report, KWM has issued this statement:

We do not comment on any matter concerning our people, whether individually or collectively, in order to protect their privacy.

Before Christmas Legal Cheek revealed news of a rescue operation being coordinated by a host of City law firms to take on KWM’s 60 trainees. Magic circle pair Linklaters and Allen & Overy have both gone public with pledges of support to the unfortunate rookies.

KWM confirmed its intention to seek administration in a court filing made last month.

42 Comments

Anonymous

Disgraceful. Those partners have a lot to answer for.

(73)(0)

Bantah warrior

Such LADS.

(9)(17)

Anonymous

Any more news about trainees?

(1)(3)

KWM trainee

They still ‘pay’ us, but it’s week by week now, literally like when I did my vac scheme there in 2014.

Still absolutely no info from HR as to what’s gonna happen to us. Some of the trainees in other departments were told by their supervising associates not to even bother coming. Most of us are just watching YouTube videos, sitting about and waiting for a miracle rescue.

One of my mates joked before the Christmas break that I’ll be offered a spot at Jones Day. Considering how desperate we’re starting to feel I’d probably accept it.

(40)(0)

Jones Day Partner

Maybe… Send picture first

(73)(0)

KWM trainee

Will a dick pic do?

(21)(0)

Adam Deen

Yeah, I like both.

(6)(4)

Anonymous

You like looking at men’s genitalia? Is that whilst doing a TC application to the magic circle firm DLA Piper, or whilst you are working at Jones Day?

(4)(2)

Adam Deen

Stfu tumor, or I’ll drill you.

(0)(4)

Anonymous

Lol, whatever mate.

Adam Deen

U jelly brah?

Anonymous

Agreed – moving from KWM to a global law firm with no debt and conservatively managed finances would be awful.

(5)(5)

Anonymous

Jones Day and no debt? You’re having a laugh!

(1)(2)

Anonymous

The joys of LLP business structures – partners pull out millions upon millions each year to line their own pockets, and then have very little responsibility when these type of things happen.

I would be interested to know how/why they decided to not pay 100 people instead of spreading it across the entire staff population. Considering if the firm still existed in some format, that any on long term sick or maternity leave would have a stronger case for discrimination, it seems concerning they have picked on those people in particular.

(17)(2)

Anonymous

I understand that the partners are on the hook for:
-the capital they invested in the firm (most partners don’t have this money lying around and so borrow from the bank);
-up to the last two years of their drawings, as these were made on account of profits that the firm didn’t make;
-taxes due from the firm; and
-rent (as the partners were the guarantors of the lease).

I understand that this boils down to roughly £1m of liability for relatively junior partners on £200k per year. Don’t forget that bankruptcy will get you struck off, and so the choice is to pay off a debt larger than your mortgage, which will act as a millstone around your neck for the rest of your career, or quit the profession and start again.

If that doesn’t looks like one heck of a responsibility, I don’t know what does.

(25)(1)

Anonymous

These are the same partners who have been burying their heads in the sand for years while the situation has just got worse and worse – they allowed it to get this bad knowing full well what was going on. How they felt it was appropriate to draw as much as they did knowing how awful the firm’s finances were shows how selfish they are.

And yet even with the “limited” liability they have, they still can’t cover the salaries of those earning a fraction of what the partners have drawn in the last three years or the personal assets they own.

(8)(1)

Anonymous

You can certainly level that charge at those at the very top (who were, in the main, the ones who left first).

But the majority of partners have very little oversight over the day to day running of their firms (especially with the rise of non-lawyer managers in City firms). The only real vote these partners get is a vote with their feet.

But moving firms as a partner is difficult, expensive and often doesn’t work out. I can see why they bury their heads in the sand and hope for things to improve/not get any worse rather than risking a move.

(8)(1)

Anonymous

I was a non-fee earner at KWM, only at manager level and knew how bad the finances were. Maybe the non-board level partners needed to take more responsibility and question what was going on more often, rather than sitting back?

(9)(0)

Anonymous

The initial comment is simply untrue.

1. It is possible to practise as a solicitor whilst an undischarged or discharged bankrupt. Read the SRA Code of Conduct.

2. If a partner has the means to pay whatever liabilities are ultimately owing, it is not a “choice” as to whether they pay the liabilities or “quit the profession and start again”; the liabilities simply have to be paid. Any attempt by a partner to divest his or her assets to avoid payment would likely be set aside by a court under s238 of the 1989 Act.

The amount of total nonsense spoken by some on here is laughable.

(5)(2)

Anonymous

Bankruptcy doesn’t result in an automatic striking off, that’s true, but it does result in an automatic suspension of your practising certificate. See: https://www.sra.org.uk/consumers/solicitor-check/approval-denied.page

I believe the choice referred to above is the choice between declaring bankruptcy and being suspended automatically (i.e. likely destroying your career), or labouring on under huge debts.

(0)(0)

Anonymous

“..our people” yeah right. An email saying “..you will not be paid tomorrow, but are still welcome to come in if you do so wish.”

Yes.. They know how to treat ‘their people’

(14)(0)

Anonymous

Hilarious isn’t it? They’re so caring and thoughtful of their employees they decided not to pay them. Such a nice post-Christmas treat.

(4)(1)

Former KWM

Haha, typical SJB. Worst turbokhunts in the Square Mile.

(5)(0)

Anonymous

This post has been removed because it breached Legal Cheek’s comments policy.

(1)(2)

KWM future trainee

Nice, LC stands by its sponsor to the bitter end. Spineless flogs.

(7)(1)

KWM Trainee

A good number of the firms trainees have already been sorted via departmental sales or are going with their respective partners. For those of us less fortunate, there are c25 trainees that require places elsewhere.

Cries of “the profession will rally” seem a distant memory….

(19)(2)

Anonymous

For over 50% of the trainees to have secured something already is actually pretty good going, especially given the Christmas break. I know it doesn’t necessarily help those who might not have a pay cheque in a week or two, but unfortunately these processes of moving trainees to other firms take time and are usually dragged out over a number of months. Really hope the remaining c25 get sorted soon though, as well as those who future trainees who probably are finding it even more difficult to find a new firm.

(14)(0)

Keele LLB

Hey guys Keele llb here. Can I get that sweet TC with a top firm? Keele is the best university in the entire midlands. So I should be set

(9)(23)

Anonymous

This post has been removed because it breached Legal Cheek’s comments policy.

(2)(1)

Anonymouse

Controversial comment alert. Does anyone else find this incessant ‘Won’t someone please think of the trainees’ plea somewhat disrespectful to the rest of their colleagues who, like them, may soon find themselves jobless? I understand that they’ll have served part of a training contract and may now have to find another firm to serve the remainder and I have every sympathy for them with that, but no more than I have for the rest of their colleagues too. Dreadful situation all-round.

(17)(5)

Anonymous

It’s not disrespectful – there are plenty of other people rallying around both business support staff and qualified lawyers at KWM to help them find new roles.

The difference with the trainees is that if they don’t qualify, their whole pursuit of the career up to this point could be for nothing. There is a significant chance that they could never qualify as a lawyer. In contrast, pretty much any other staff member doesn’t have that added complication of needing to meet various regulatory requirements as well as finding a new employer.

(21)(5)

Chris Grayling's Bald Head

This seems more than a little unfair…

(1)(0)

Anonymous

I am one of the “hot 100” and am support staff. Unless you’re lucky enough to have a genuinely nice partner looking out for you you’re totally stuffed. There’s now hundreds of people scrabbling around with useless agents promising to get them their perfect job. Feeling sorry for us doesn’t pay our bills!

(19)(0)

KWM trainee

The fact that they left you lot with only statutory minimum is utterly outrageous.

(4)(0)

Anonymous

Maybe if they stopped paying the Head of Real Estate the 100 people could have been saved.

(12)(0)

Revenue

As an ex SJB bod, who was shitted on from a monumental height by those rats that have since departed that ship, morality and ethics means nothing to these people. Knowing the difference between right and wrong was fundamentally lost on them. They chose to ignore what was the indefensible and assumed they were invincible. Well karma is a bloody good deliverer and I for one do not feel sorry those shysters. When I left that stinking ship, though it didn’t feel like it at the time, somebody did me a huge favour otherwise I would have been left carrying some of those debts. Every cloud really does have a silver lining.

I met with someone recently – somebody promised a job by the firm which then reneged on the offer but only after that person had uprooted their life for them – and he was beaming cheek to cheek reading what is unfolding. He was told he’d never make it as a lawyer – he proved them wrong. I’ve not met a single ex-colleague who has a positive word to say about that place. I do feel sorry for the support staff as they were the only decent people there.

(14)(0)

Anonymous

Each and every partner at SJB/KWM must take responsibility for this implosion. Every single one of these predominantly fat and greedy old white men (of course, it is the women on maternity leave who lose their salaries first, what an appropriate final act for this “partnership”).

Every single employee faces challenges: trainees who are desperately seeking to finish their qualification; associates must seek jobs in a terrible market; senior associates who in some cases are watching almost a decade of work go up in smoke; secretaries and support staff must find work too. All while funding mortgages, school fees and so on.

Yeah, the partners might have some liabilities but they can always draw on their assets if necessary, but they caused this mess. They got the upside; they can take the downside too. In any event, most of them are heading off merrily to nice, cosy slots at US firms, leaving the catastrophe behind.

Never ever forget it was the Big Cheezs who drove SJB into this merger. These same Cheezs then promptly ejected to other firms when the Aussies wouldn’t their 1980s act.

(5)(1)

Anonymous

Good comment. Not sure if I understand the final paragraph though. 🙁

(0)(0)

Anonymous

Sorry, late night rambling. Basically, the richest, most arrogant and greediest partners in the firm, drove the firm into this merger and they then promptly left, destroying all confidence in what they had created.

(2)(0)

Anonymous

Thanks for clearing that out, wholly agreed.

(3)(0)

Anonymous

I worked there back in the day. They weren’t even paying the company that cleaned the windows. Partners are scumbags. Shame cos it was a nice place to work. A lot of good people has been totally shafted.

(2)(1)

Anonymous

Mate I’m a former SJB fee earner as well. It never was a nice place to work at, far too many sociopaths. Maybe business services or HR were different, but for us sols it was cutthroat from day 1.

(1)(0)

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