Clutz attempts to avoid redundancies
The head of Clayton Utz has revealed that the firm’s ‘flexible work program’, inviting staff to take unpaid leave or move to a four-day week, was an attempt to avoid redundancies.
Speaking with Lawyers Weekly, Darryl McDonough (pictured) confirmed that there had been “one or two” redundancies since December, when the firm is believed to have laid off around 24 employees in Sydney and Melbourne.
Around this time Clutz also invited staff to buy up to four weeks’ additional leave between 1 January and 30 June, apply to move to a four-day week or nine-day fortnight, or take leave without pay.
The firm revealed that, since November, 48 legal employees have purchased additional leave, eight have reduced their hours and 15 have taken unpaid leave.
“Having regard to the economic circumstances we felt it was appropriate to offer a number of different programs to our employees to give them an opportunity to have a holiday ... or cut back on work commitments to achieve better work-life balance,” said McDonough.
He added that the firm would endeavour to accommodate those who took up a flexible work option and who subsequently wish to return to their previous working arrangement.
Despite eliciting a positive response from Clutz lawyers, the program has not had a noticeable impact on the firm’s financials, said McDonough, who indicated that the current financial year’s balance sheet will look much like the previous 12 months.
But McDonough said he was not expecting the program to significantly reduce the firm’s cost base but, rather, help to keep redundancies “to an absolute minimum”. Another move with the same aim was an attempt to defer the start date of graduate recruits until 2014.
“It’s about managing resources with regard to workflow ... the last thing you want to do is bring a graduate into the business when there’s not enough work there to keep them occupied.”
Only three graduates have deferred nationally.
While it is unknown whether the programs have prevented any lay-offs, McDonough insisted that redundancies represent a small percentage of lawyers leaving the firm. He said attrition was chiefly responsible for the firm’s dwindling headcount in recent months.
“People move on for a variety of reasons and what we’ve sought to do is not replace them.”
To address attrition in the firm’s transactional practices, McDonough said Clutz is shifting idle lawyers to its “reasonably busy” construction, litigation and energy & resources groups. This will ensure the firm has the human resources it needs when confidence returns to the market, he added.
McDonough admitted, however, that he does not anticipate a discernible upturn in transactional work until well after the federal election is decided. In the meantime, the firm is sitting tight and will not downgrade any of its practice areas.
“You’ve got to be careful of overreacting to an economic circumstance ... the last thing you want to do is exit areas just because they’re having a bit of a rough patch.”
The firm won’t be introducing a pay freeze either, according to McDonough. But he admitted that only some of the firm’s top performers have been given a moderate-level increase in salary, with many others missing out.
“That’s just the reality of the market we find ourselves in,” he added.