Today (4 January) the European partnership of King & Wood Mallesons (KWM) has stopped paying 100 staff as the firm heads towards administration. The firm confirmed its intention to file for administration in a court filing in December 2016.
Staff affected are mostly in business services, but the pay halt includes a few fee earners. The staff going unpaid include those on holiday, maternity and sick leave, but those concerned remained employed by the firm.
Employees were notified of the decision yesterday (3 January), on their first day back after the Christmas break.
According to the firm’s latest LLP accounts published in February 2016 on Companies House, there were 425 support staff and 452 fee earners across the UK, Europe and the Middle East in financial year ending April 2015.
A spokeswoman for the firm said: ‘We do not comment on any matter concerning our people, whether individually or collectively, in order to protect their privacy’.
The pay halt comes as the firm continues to shed partners, having lost the bulk of its top billers since the firm halted its recapitalisation plan late last year. KWM’s European practice is carrying more than £30m in debt and the recap plan failed in November.
Frankfurt-based corporate partner Michiel Huizinga is expected to move to Allen & Overy, an appointment subject to a partnership vote.
Huizinga is a private equity (PE) expert who joined KWM from Freshfields Bruckhaus Deringer in 2011 where he was a principal associate. During his time at KWM he advised clients such as Star Capital Partners, Schroders, Techcent Group, JIC (Jiantou Investment), ARDIAN (Axa Private Equity) and CCC Holding. For A&O, the move will soften the exit of PE partner Michael Bernhardt who quit for Milbank, Tweed, Hadley & McCloy in December.
Also in Germany DLA Piper has also taken on two partners, taking KWM’s former head of real estate for Germany Lars Reubekeul and real estate partner Florian Biesalski.
Meanwhile, in China KWM has taken on two partners from Cadwalader Wickersham & Taft, including Cadwalader’s former Asia managing partner.
Corporate lawyers Rocky Lee and Li Xiaoyang will join the firm at the start of this year, after Cadwalader confirmed in September last year it would close down its Beijing and Hong Kong offices. In a statement KWM said Lee joins along with his entire team of lawyers and staff.