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Magic Circle Meltdown: Layoffs at Allen & Overy, Linklaters, and Clifford Chance

Friday, January 23, 2009 10:10 AM - By Kashmir Hill

london.gifThe London-based “Magic Circle” firms may have had a strong presence on the 2008 global law firm rankings, but a few of them are off to a rough start in 2009. Earlier this month, we reported, “having already laid off 20 New York litigators, Clifford Chance today let go of 70 - 80 London lawyers.”

The layoff disease has spread to two other Magic Circle firms. Layoffs were announced in the New York office of Allen & Overy yesterday. Our sources says:

Allen & Overy just fired two paralegals and three attorneys in the NY office. These firings are said to be “performance based.” Word on the street is that there will be more, but they will come in bits and pieces to avoid bad press. Rumors have already started about other attorneys being let go in offices abroad.

[UPDATE (Jan. 26, 10:34 a.m.]: In response to our inquiry about layoffs, A&O spokesperson Jaime Bruck says, “This is nothing more than the normal management of our business. We don’t comment on the reasons for individual departures. The total # of attorneys in NY is 171.”]

And Linklaters plans layoffs soon. The Old World firm is going “New World” by axing 70 partners and 10 percent of its associates, reports The Lawyer:

Linklaters’ top management is to drastically overhaul the firm’s structure, slashing up to 70 partners and 10 per cent of associates in a bid to become a smaller, more profitable operation.

The programme, understood to be called Linklaters New World, will also see redundancies among support staff. The firm’s offices in Western Europe are thought to be most vulnerable to cuts.

Those layoffs could start as soon as February.

With the Guardian reporting that “Britain has officially entered recession for the first time since 1991,” the layoff news from London seems inevitable. But some of the firms in the circle— Freshfields and Slaughter & May— are still feeling magical. Good news from those firms, after the jump.

While A&O is cutting back in New York, another Magic Circle firm is hiring. Freshfields Bruckhaus Deringer has raided Covington & Burling’s ranks to expand its New York office, reports Am Law Daily:

The Magic CIrcle firm has hired three partners in New York—Aaron Marcu and Adam Siegel from Covington & Burling and Benito Romano from the white-collar criminal defense group at Willkie Farr & Gallagher—to launch a U.S. litigation practice. The trio, who officially join on January 26, will form the base of a new complex litigation and white-collar defense and investigations practice.

Meanwhile, Christopher Saul, a senior partner at Magic Circle firm, Slaughter and May, tells The Times that the financial crisis has actually been good for the firm:

The last of the big traditional partnerships, with nothing as vulgar as a public relations department, it prides itself on never having hired a partner from outside the firm. But its restrained approach — compared to the gung-ho expansionism of Clifford Chance or Linklaters — once derided as old-fashioned, is now looking more appropriate in the credit crunch era.

Earlier: International Layoff Watch: Clifford Chance Knocks off 80 London Attorneys

Linklaters to axe up to 70 partners in massive shake-up [The Lawyer]
Freshfields Launches US Litigation Group with Three Partner Hire [Am Law Daily]
Slaughter and May sidesteps the financial carnage [Times Newspaper]
Recession Britain: It’s Official [The Guardian via The Daily Beast]

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Posted in: Allen & Overy, Clifford Chance, Layoffs, Linklaters

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