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Reed Smith to cut London lawyer roles due to pandemic

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‘Targeted redundancy process’ will impact ‘small number’ of associates and staff, global outfit says

Reed Smith has rolled out a series of fresh belt-tightening measures in response to the COVID-19 pandemic, including pay cuts, furloughs and a round of redundancies in London.

The US outfit said it was “initiating a targeted redundancy process that will impact a small number of lawyers and staff” in London, the firm’s largest office with over 350 lawyers. It is understood to be one of the first major legal players to cut London roles as a result of the crisis.

Professional assistants and a number of support staff will drop down to a four-day working week, with a corresponding pay reduction, and a “small number” of employees will be temporarily furloughed. The salaries of professional staff earning more than $100,000 (£80,000), who are not subject to other financial measures, will be reduced by 6%.

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Sandy Thomas, Reed Smith’s global managing partner, stressed that partners will “continue to bear the largest share of the financial burden of the firm’s action”. Back in March, the firm took the decision to slow partner cash distributions as it braced itself for the “short-term and potential long-term economic impacts of COVID-19”. Then, in April, it announced a 15% cut to associate pay for May through the end of August.

The salary cuts have now been extended to the end of the year, Reed Smith confirmed, with fixed share partners and counsel taking hits of 14% and 12.5% respectively, and associates a cut of 12%.

Reed Smith said it expects most of these measures to be temporary, and during this time, healthcare and other benefits will remain intact for all lawyers and staff.

“Like all well-run businesses, during the normal course of managing the firm we continually evaluate the size and shape of our global organisation to ensure that it matches the needs of our clients,” Thomas added. “This practice is as important as ever during the pandemic.”

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44 Comments

Akin Gump 1PQE

Firms doing this should surely be shamed. No excuse for it in a large London office.

(54)(6)

Anon

Kirkland is doing the same but is doing all it can to avoid the situation from going public. I’m aware of a number of people working there who are been forced to actively look for alternative employment before they are axed.

(41)(2)

Kirkland NQ

If you can’t stand the Kirkland dolla heat, stay away from the moneykitchen.

(16)(33)

Stewy

If it were making all those “dollas” it wouldn’t be putting so many people in that position.

(31)(4)

Kirkland NQ

When the weak beta 6PQEs associates get the boot, the winning NQ alphas like me get to collect the spoils of success. Smashing new deals and receiving new instructions every day, unstoppable.

Realist

@ Kirkland NQ below –

You truly are a very naive NQ. I’m sure your advice is “toppppp qualit-aaah” just like the rest of the mid-level associate = salaried partners there. You’ll be out the door like the rest of them before you know it.

Kirkland & Ellis 2PQE (third Lambo soon)

Kirkland is only getting rid of the losers. It’s a bit like cleaning out the trash. If you can’t handle the big city game, then get packing.

(9)(37)

Kirkland 1PQE

Fuuuarkkkk brah, I’m completing a purchase of my second Lambo next week, can’t wait!

(5)(7)

Kirkland & Ellis 2PQE (third Lambo soon)

Rest easy king and be patient. It only gets better from here on out!

Yeah right

Erm sure wishful thinking, more like it’s trying to save face and keep itself out of the headlines. The only trash there is the accumulation of people who failed to make it at their previous shop (mostly MC) and are now giving it a second shot at a US outfit because.

(19)(8)

Anon

This is a laughable response. People who fail at the MC won’t get into a US firm. The MC is of better quality.

2638

Lots of people who know they won’t make partnership at a Magic Circle jump ship I’m afraid and they know that no other MC firm would generally give them that opportunity if they are a “senior associate” or “managing associate” so they give it a second shot at a US firm because the standards are much lower.

(Real) Kirkland NQ

Can you give more details? I’m not aware of this happening (based on the staff lists which are circulated weekly, it’s clear we’re still hiring/people haven’t been leaving). Your comment is surprising and concerning.

(7)(20)

Bantah & Harmony

Top firm, top result

(9)(5)

Kirkland bigboi

“Like all well-run businesses”

Lmao Reed Shet, as if

(31)(1)

Bad breath Dan

This leaves. Sour taste in my mouth but not sure if that’s due to the action they’ve taken or the fact nobody in this community gave me any advice as to how to stop my breath smelling and I have subsequently been unable to take any remedial action in the interim period.

(6)(11)

Sigh

So the NQ pay was increased from £72K+ to £84K, and then they went on to sack a few employees?

What a fantastic business strategy to reward law firm loyalty. The morale must be extremely high.

(39)(3)

Confused

What are you chatting about? Of course it won’t be high if they’re laying people off. Did you read the article? Or are you high?

(1)(8)

Sighs

https://www.legalcheek.com/2020/01/reed-smith-ups-nq-lawyer-pay-and-billable-hour-targets/

(See this article)

Do you know how to read and do your own research before you comment? Or are you illiterate?

(11)(3)

Confused

I wouldn’t be typing this if I was illiterate would I? That’s the stupidest comment ever posted on LC, which is saying something…!

(2)(13)

LC

Haha ‘Confused’, you are really confused as indicated by your name.

Wombleby

Being royally hoisted by his own petard comes to mind.

(4)(1)

Confused

Yes, “Sighs” really showed himself up, lol!

Gaba

NQ salaries are included in the current cuts.

(2)(0)

Sighs

Should’ve done a Slaughter’s and just decreased NQ pay instead of sacking employees.

Sends awful messages across a firm on whether or not you are being appreciated or valued as an employee (especially if the sacking comes after increases in NQ salaries).

(34)(2)

DB/DC

This is what happens to firms that only have a Band 4/5 Pensions practice.

(21)(2)

Maximilian

Hear Hear, old boy! Pensions should be the live-blood of any city practice.

(5)(0)

Insider

Poor Reed Smith. Desperate to wear big boy trousers, it hiked up NQ salaries to keep pace with its perceived competitors even though it obviously doesn’t have the financial muscle and client base to sustain higher wage outgoings. Now the associates are going to pay the piper while the partners are laughing all the way to the bank.

The hiring of dozens of KWM lawyers in the wake of its collapse cost absolute stacks and went down like a lead balloon with zero benefit to the bottom line.

Worst thing is that Reed Smith might be the first mover on redundancies, but definitely won’t be the last.

(46)(11)

Food for thought

To be honest I find this a very bitter response trying to undermine Reed Smith (and other US firms) because you’ll probably feel better about your firm (if any)… Decent research a bit random though considering that all US firms are forced to lay off people because the US accounting year ends on 31 Dec and they have limited cash whilst UK accounting year is in April meaning they can still sustain themselves… so all the stories about RS, Kirkland, Shearman etc should not be taken out of context.

Also, I doubt any partner is laughing all the way to the bank but if you say so… I guess your experience as a professional law firm observer has fortified you with the required knowledge.

Good luck on your TC applications or resolving your inferiority complex about your firm.

(23)(16)

STALLONE

Cool story brah.

(4)(1)

truthsiren

“forced to lay off people because the US accounting year ends on 31 Dec”

LOL nice try there, but what you’ve just said is utter doublespeak horsec*ck. Firms should always keep sufficient capital buffers to withstand temporary disruptions to workflows and billings irrespective of their accounting year. If they haven’t got such cash buffers available then something is obviously not right with the firm as a whole.

I’m sure the twenty or so London fee earners would be thrilled to know their jobs were chopped and lives thrown into disarray (let’s face it: the current legal jobs market is pretty f*cked) due to the US accounting year being 31 December, way back when Covid-19 was largely unknown and economic outlook in the US was bullish to say the least.

By all means keep drinking the KoolAid though, the partners will love it.

(9)(6)

Food for thought

What kind of paranoia is this…

Quarantine has started in March and will probably continue until July if not early sep… What type of firm would stash that much cash and for what reason… Law firms are not liquid entities and are not meant to be so since they are not trading stock or other commercial goods so cash flows will most definitely be a problem.

I also at least recognise that compared to all other firms RS is carrying out a formal redundancy process as opposed to forcing termination agreements and NDAs under the table.

Also considering that covid was indeed unknown in December they would not able to take precautionary measures… I find a lot more preposterous that slaughters decreased salaries permanently considering covid is only a temporary issue and they should have no cash flow issues

(9)(4)

Old Codger

Still up at 1.37am eh? Why you must be a very hard working lawyer indeed.

Unimpressed

Outrageous from Reed Smith, cutting 20 fee earners when they are still paying bonuses.

The firm must be doing really badly.

(12)(2)

Sad toiler

It’s just partner greed, plain and simple. The firm is sufficiently capitalised to weather the storm, and pay cuts along with staff furloughs ought to be enough to get through temporary slumps in billings.

(12)(0)

ggg

The bonuses must be for last year’s work (already billed and collected), not this year’s. Going to lose a whole load of people if you try and take away what they already worked to earn.

(3)(0)

Skadden NQ

Don’t hate the player, hate the game.

(4)(1)

Isle of frogs

I’d hate the player if I had to work at canary wharf lol

(6)(2)

LLB flog

Back to your lecture notes son, your Torts exam is due this Thursday.

(2)(0)

Anonymous

What stories about Shearman are coming out? I haven’t heard of any layoffs there yet.

(2)(0)

Skadden 2YPQE

BANG Average firm, BANG Average wages, and BANG your careers gone…
Not worth joining here, the name will add little to no prestige/impact to one’s CV at all.

Just a wannabe big US player with little more to it.

Join Skadden! We get s**t done.

(2)(4)

No

Why on earth would you want to work for Skadden…the most boring practice in a US firm (possibly along Gibson Dunn); banking and dispute resolution *uncontrollable vomiting*

(1)(2)

skadden

Also a totally horrible grimy sweatshop

(2)(0)

Anon

I remember during my LLB I would have killed to train with Reed Smith. At that time they were seeing increases in size and profitability and were marketing hard. They did a presentation at my uni (not a particularly good one, so we were impressed they made the effort to come out), I went to an open day, and I ended up interviewing with them. Alas, no success.

Since then I have worked across from them on various matters during a paralegal role and my TC. I didn’t have a negative experience but wasn’t overly impressed, and the people I talked to seemed miserable, even for BigLaw.

(4)(3)

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