Editor’s letter

Brave New World?

‘Gathering stormclouds’ was one of the more popular metaphors to adorn the various article offerings and press releases that pinged into my inbox back in the heady days when something called a ‘credit crunch’ was causing just a few curious ripples of concern in the business world.

I doubt whether many would go for this particular phrase now. Rather, we have seen a succession of decisive downpours in the first two months of business in 2009. And at the risk of imagery overkill, some organisations and reputations might be concerned about staying afloat.

As for the legal world, it was pretty heavily stunned back in January, when Clifford Chance (CC), the world’s largest law firm by revenue, made a formal announcement that it may have to make between 70 and 80 lawyers redundant in London owing to lower activity levels through the downturn. It has since been confirmed that the partnership structure itself is also to be reviewed at CC. This may later lead to some partner departures from practice areas and offices across the international network.

As newsworthy as this was, however, it was then followed (and possibly overshadowed) by the giant thunderclap just weeks later above 1 Silk Street − the London home of fellow magic-circle law firm Linklaters. At the end of January it emerged that Linklaters was to make up to 270 employees redudant in London, a combination of lawyers and ‘business support’ staff, with rumours some partners may also leave in future as part of a confirmed wider restructuring plan.

Linklaters was left somewhat more exposed to the elements, however, for the fact news of the redundancies made it to the media before the management team had had the chance to make a formal statement as CC had done. By the time this was accomplished, something of a media storm had already been raging for a couple of days.

When management did speak up, it emerged that these reports were indeed correct, and moreover that they were actually part of a broader strategy for these straitened times. This process had even been given a name internally − the ambitious-sounding Project ‘New World’. It is the land (one assumes) the good ship will sail into once the waters of this quite deep recession subside − all the better placed to fight its corner in the future.

As with the redundancies announced by so many firms since last summer, it is hard to argue with the rationale of managing partner Simon Davies. “We are acting now to reduce our headcount in order to meet anticipated demand,” he said. “It is vital that the firm is in the best shape to meet the challenges which lie ahead.” The message is not dissimilar to those offered by many firms on announcing their redundancy consultations. The decision is regrettable, but the business just isn’t there to make the sums work.

Ever brand-conscious, as all large organisations must be, Linklaters will hope that the promising images conjured by New World do the trick, certainly in terms of fulfilling its immediate strategic goals. As we discuss in our cover story on the thinking behind corporate ‘core values’ in this issue, however, the long-term ‘employer brand’ also needs to be given careful and consistent consideration by all firms looking to compete, even as attrition apparently evaporates before our eyes.

On a related note, the annual Sunday Times ‘Best Companies’ list has now been published, so congratulations to those law firms that made this year's cut, including Lewis Silkin, CMS Cameron McKenna and Charles Russell; all three new to the competition. It is a particularly impressive debut from Lewis Silkin, which smashes stright into the top-20 (in 19th place) and the sector overall does itself really quite proud for a downturn. Manchester-based Pannone leads the pack once again jumping from fifth place in 2008 back to third, while other familiar faces include Brabners Chaffe Street, Olswang, Mischon de Reya, Freeth Cartwright, Mills & Reeve and Berwin Leighton Paisner. Clearly, many are still heeding the message that employee engagement as an ideal mustn't be allowed to become yet another victim of this recession.

Interestingly, in last year's (2008) competition it was Linklaters that became the first of the magic-circle law firms ever to make this prestigious list, 90 per cent of the marks for which are allocated based on confidential and randomly-distributed staff feedback surveys.

Richard Brent, Editor

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