The official unemployment rate soared to 5.2 per cent in February - its highest level in nearly four years - and lawyers have not been left untouched by the latest cutbacks of the economic crisis, writes Sarah Sharples
Rumours of redundancies have been echoing around the legal industry as the global economic downturn worsens. HWL Ebsworth Lawyers were implicated in RollOnFriday.com, a UK website which claimed the firm was "getting rid of staff very quietly and exceedingly quickly" - to the point where the HR department's internal news bulletin could not keep up.
HWL Ebsworth confirmed with Lawyers Weekly that while 17 staff members had been made redundant since December, an additional 55 new employees had been added to the firm in the same period.
Six lawyers, from a number of different practice areas, were made redundant, as well as two graduates, and three paralegals from a specific property sub-division where work had softened.
Six personal assistants (PAs) were also let go, after the firm completed a national rollout of technology to provide digital dictation capabilities. This service delivered significant efficiencies and enabled the PA ratios to be reduced, Juan Martinez, managing partner at HWL Ebsworth, told Lawyers Weekly.
"The above is in the context of hiring 55 new staff and lawyers in the same period - [it is] a net increase in the period 1 December 2008 to now of 38 people. This result is obviously national, and in particular practice areas, in particular geographical areas, because things are not uniform, but shows a continuing strength and growth, particularly given Christmas in between," he says.
The firm recently announced the appointment of seven new partners in their banking and finance, commercial, property, workplace relations and health practices.
Martinez says the lateral recruitment was made possible by HWL Ebsworth's business model, which focused on keeping costs down, while building a high-quality, full service, national practice.
"We expect this careful and responsible management of resources for growth to continue, in what is obviously a very challenging market that does present good opportunities for a firm of our type and a business model where all our stakeholders are well looked after as well as our clients getting great value," he says.
Thomson Playford Cutlers also confirmed with Lawyers Weekly rumours that a number of lawyers and support staff had been made redundant as a result of the economic downturn. However, the firm refused to confirm the number of staff affected and from which practice areas cuts were made.
Brett Goodridge, chief executive at Thomson Playford Cutlers, said the redundancies were a regrettable but unavoidable decision, and were attributable to the difficult economic conditions and the flow-on impact on the lessening demand for legal services.
"The redundancies were not contained to one specific area of legal services. They were a reflection of a current general downturn in client activity," he says. "This was an extremely difficult decision, but a necessary one for the firm's ongoing success.
"We remain focussed on our core areas of expertise and we will continue to recruit in the future as we identify a need, or gap, within our firm."
Thomson Playford Cutlers said the firm had no plans for further redundancies but were unable to rule out the possibility of future outplacements.
Blake Dawson also came under the spotlight last week when they confirmed a review of their business was being conducted due to the rapid deterioration of the economy. The firm indicated that less than 100 staff would be affected by cuts.
"We are moving early to prepare the business for the uncertain outlook to continue for some time yet. Our review is focused on ensuring we have the right mix of skills and experience in our team to continue to be a high-performing firm for our clients," a statement from the firm said.
The review was instigated despite Blake Dawson announcing the opening of a new office in Singapore in November and in Adelaide in December.
Meanwhile, news of redundancies overseas came from DLA Piper last week. The firm announced that it was restructuring its Asia practice, mainly in Hong Kong, with 54 people affected, including 20 fee earners and 34 support staff.
When contacted by Lawyers Weekly, however, DLA Piper could not confirm whether any Australian lawyers were affected.
Back in Australia, DLA Phillips Fox has an exclusive alliance with DLA Piper. Tony Crawford, chief executive of DLA Phillips Fox, says the firm is keeping a close eye on the economic environment and has no current plans for further redundancies in the wake of cuts made last year.
Other leading firms contacted by Lawyers Weekly - including Allens Arthur Robinson, Mallesons Stephen Jaques and Freehills - all indicated that no redundancies had been made, nor were there any plans for future cuts.
Minter Ellison Lawyers also indicated that redundancies had been avoided in Australia to date.
John Weber, chief executive partner of Minter Ellison, said a wide-ranging review of all operating and discretionary costs would continue as part of the firm's budget process for the next financial year.
"Our objective is to continue to minimise the effects of the market-wide softening in demand for legal services on our staffing levels and our operations," he says.
David Fagan, chief executive partner at Clayton UTZ, says the firm's priority is to keep people in jobs and continue to service the needs of clients in the challenging business environment.
"We do not have a redundancy program in place, but, like all businesses, we are reviewing our resourcing requirements on an ongoing basis. We are carefully monitoring developments and working hard to manage our workforce to meet the needs of the firm and our clients," he says.
With predictions that the unemployment rate may rise to 7 per cent, further reviews into firms' operating costs and efficiencies may be a distinct possibility this year, which could result in more Australian lawyers facing the firing line.