Corporate lawyers search for a deal in the arid M&A landscape
CMS is making redundancies in its UK corporate practice.
The firm is axing 19 lawyers, a source told RollOnFriday. It is understood that the firm has over 250 corporate lawyers in the UK, with the majority based in London. The cuts may reflect the slowdown in global deals this year.
“A partner told us how hard it was for him to give the news...we all feel very sorry for him I’m sure," said the insider. "No effort to make team pay cuts and no effort to offer flexibility for part time work or unpaid career breaks”.
"We’ve all been told not to talk to the press or leak the information to ‘protect our colleagues’ feelings’ when we all know all the firm actually cares about is its own reputation,” the source told ROF.
They added that the firm was “cutting the London office whilst bolstering lawyers in Sheffield/Manchester.” And that the firm has also “reported to us that they are on target profit wise…so at least the partners get their pay.
In August, the firm announced global revenues for the financial year January-December 2022 of 1.862 billion euros, an annual growth of 6.2%.
Another insider said affected staff were informed last week that a major redundancy round was underway. “From the looks of it, it’s very much a ‘last in, first out’ approach," opined the source. "Obviously the people directly affected are gutted but it’s also pretty shocking for the rest of us - they wouldn’t give any guarantees about whether more cuts would be required.”
CMS raised NQ base salary from £100,000 to £105,000 in July. The firm scored a trainee retention rate of 78% this autumn, as it kept on 47 out of its 60 qualifying trainees, following a 68% retention rate in the spring (when 19 out of 28 were kept on).
A CMS spokesperson declined to comment on the redundancy consultation.
In other non-cheery news, Taylor Rose is also cutting jobs. A spokesperson for the firm told RollOnFriday: “In common with many businesses in the current environment, rising costs and changing working patterns following the pandemic have resulted in the need for us to carefully manage our costs, and are therefore reviewing a small number of areas of our business that are inefficient or not financially performing."
The spokesperson confirmed that a consultation is "well underway", adding that the firm is "doing everything we can to support employees through this process, while evaluating alternative solutions and ways of redeploying employees at other locations, as well as potential redundancies."
It is not known which roles will be impacted at Taylor Rose, as the consultation is ongoing. However, RollOnFriday understands that the current consultation will only affect a small proportion of staff.
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Comments
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I guess this is what happens when you give everyone chunky pay rises, but don’t have the additional work to follow.
Following the crazy salary bumps of 2021/2022, its inevitable that more firms will follow like this as they realise they can’t afford to honour the pay rises they gave to everyone.
(Full disclosure - I am an associate who is all for pay rises and definitely feel like I’m being underpaid at my firm. But job security is also very important to me!)
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All those comments from naive NQs complaining that CMS hasn’t increased their already massively over-inflated NQ salary haven’t aged well…
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I can't speak for the CMS and Olswang bits of CMSNabaWang but this comes straight from the Nabarro playbook...
...in 2015/16, their profits were up 21%, so they gave their (badly underpaid) fee earners 3% raises. [redacted]
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Is the slow down in deals likely to only to affect the top / higher end of the M&A market? Junior corporate lawyer in a boutique Scottish corporate practice asking…
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"CMS raised NQ base salary from £100,000 to £105,000 in July."
... and now they're cutting staff, you say?
36
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Average firm, poor form.
38
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If only there was a law that stopped companies and firms making older people redundant in favour of hiring younger people on less money
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In what other sector would a company be criticised for making cuts when revenues were down and pipeline was gloomy? I don't have an inside scoop but it feels like sensible and robust management to me. At my place they just exited "poor performers" here and there rather than call it redundancy, which feels like death by a thousand cuts. I don't see how it's relevant that the overall firm is on target; isn't CMS bloody massive? So they'll have loads of different departments in tonnes of different markets. It doesn't make sense to take such a holistic view of resourcing needs, these things are always (quite rightly) considered on a department by department basis, I would say particularly in a law firm where the extent to which folks easily be deployed into different teams or different countries is fairly limited. Sad for those affected but hardly surprising given where we're at with the M&A Market?
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@christ on a bike
a sector where they hadn’t just hired a load of junior people and given a large pay rise
32
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Interesting that consultancy firm Taylor Rose is making redundancies - are they cutting employed fee earners or the back office staff they've promised to their consultants?
35
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The firm struggled hiring corporate talent during lockdown and decided to offer corporate lawyers ONLY a pay increase to be more competitive. The firm also increased the bonuses just for corporate lawyers... Putting them on a pedestal. What a mess. I'm all for salary increases in line with inflation and market rates. But this could have been better managed. Why aren't other large firms in the same mess? Poor leadership and serious questions need to be asked.
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@ N to be fair, loads of places hired recently, not knowing what was around the corner ( not sure CMS particularly hired "loads of junior people"). My place took on 3 NQs last year, which the Partners are probably now regretting. And pay rises are market driven and wage inflation last year was f***ing mental, so big firms generally need to fall in line or lose their best people. It's almost like you don't understand how business works...
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Partners fail to win business to replace revenue lost when an area contracts. Staff pay the price.
Maybe, one day, one firm might try Partner accountability? Then again, pigs might fly.
7
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#futurefacing
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Got an offer from cms in the regions and it was crap. Currently at a national practice and they were trying to say it was a step up etc and then bowled down £2k more. This was about £34k less than the nqs in London and I am 7pqe…
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The M&A market has been really poor for a year or more now, with volumes at least 50% down due to increased cost of debt.
But the real question is who the hell was instructing CMS on M&A in the first place? I didn’t even know they had an M&A team.