Nationwide Layoff Watch: Magic Circle Firm Makes Lawyers and Staff Disappear

Summer associates will soon be arriving at large law firms. So, to paraphrase Antoine Dodson, y’all need to hide yo screamers, hide yo sleazebags, and hide yo husband (or yo gun-toting boyfriend).

While summer associates are present, certain subjects are off-limits. Don’t talk about that group of partners with a huge book of business that’s going to defect any day now. Don’t talk about that salacious lawsuit against the firm that’s still pending.

And don’t talk about layoffs — of staffers or lawyers or both. Reductions are such a buzzkill….

Allen & Overy, the prominent Magic Circle firm, has been letting go of lawyers and support staff here in the United States. The cuts have focused on the New York office. (A&O also has an outpost in Washington, D.C.)

We’ll start with the staff layoffs. As the firm announced in January, it’s sending a total of 43 positions — some out of New York, and some out of other cities — to its back office in Belfast, Northern Ireland:

• Belfast will provide a mixture of core support service processes, such as elements of Finance, IT, Business Services and Marketing.
• 43 roles will transfer in stages during 2013, bringing the Belfast office headcount to about 350.
• Relocation packages will be offered where possible with the intention of minimising job losses.
• The offices affected are New York, Amsterdam, Antwerp, Brussels, Frankfurt, Luxembourg, Milan, Paris and Rome.
• No fee earning roles are affected by this announcement.

Even though the Belfast outsourcing was announced in January, some of the affected individuals in New York have lost their jobs more recently, due to the transferring of roles in stages. In addition, the New York office has been conducting performance reviews for secretaries, and word is that the reviews haven’t been favorable. Seeing the proverbial writing on the wall, a few of the secretaries recently quit or entered early retirement. Think of it as a form of “voluntary separation.”

Now, on to the lawyer departures, which have been harder to nail down. We reached out to Allen & Overy for comment. A spokesperson informed us: “People come and go all the time, it’s just part of managing the business, but nothing outside the normal course of business.”

But some sources said the attorney departures have been… weird. They apparently started late last year — not a normal time for lawyers to leave, because most wait around for bonuses — and continued into this year. Lawyers would just stop showing up to work, sans explanation. Some of the vanishing attorneys were fairly junior, first- or second-year associates — people you’d expect to stick around for longer before lateraling to another firm or going in-house.

There’s an explanation for the lack of explanation around these departures. One tipster told us that departing associates were asked to sign confidentiality agreements with provisions for liquidated damages in the event of breach.

Could the leaving of lawyers be related to change at the top in the New York office? Back in February, Thomson Reuters News & Insight reported:

In an effort to strengthen its foothold in the United States, the British law firm Allen & Overy has elevated the head of its capital markets group in London to become U.S. managing partner, a firm spokesman said on Friday.

David Krischer assumed the position late last week and will begin immediately splitting his time between London, New York and Washington, the spokesman said. Krischer is expected to hold the position at the Magic Circle firm for a four-year term.

He replaces Kevin O’Shea, who becomes U.S. senior partner, a new position that focuses more on the practice of law than administrative duties.

Is Krischer’s replacement of O’Shea just a routine changing of the guard? Or does it suggest, along with the lawyer and support staff departures, that London expects better from New York? London seems to be doing well; A&O’s office there recently raised trainee pay (for the first time in a few years). Is New York lagging behind?

We’ll keep an eye on the situation at Allen & Overy. If you have information to share with us, about A&O or any other leading law firm, feel free to email us or text us (646-820-8477).

UK’s Allen & Overy names a new U.S. leader [Thomson Reuters News & Insight]
Exclusive: Allen & Overy bumps up trainee pay [Roll On Friday]
Allen and Overy creates new jobs in Belfast [BBC News]
Allen & Overy prepares to shift US and European support roles to Belfast base [The Lawyer]
Changes to Allen & Overy’s U.S. and European support services [Allen & Overy (press release)]