Reed Smith has axed 45 lawyers from its US, Europe and Middle Eastern offices as it makes the ‘necessary adjustments to remain competitive’.
The firm made the decision to restructure its legal staff, along with a number of non-legal employees after it undertook a review of its staffing model.
The lawyer cuts were made in the US – the firm’s largest contributor to its annual revenue – followed by Europe and the Middle East, affecting 4% of its total 1,205 lawyer headcount across the three regions. The firm would not say how many lawyers from each office were made redundant.
Last year’s figures from Legal Business’ Global 100 survey show the firm had 1,101 lawyers in its US offices, 86 in Europe and 18 in the Middle East. London and Asia were unaffected by the job cuts. Reed Smith confirmed that overall, 2.5% of the firm’s 1650-lawyer headcount globally has been impacted from the cuts.
The news comes after Reed Smith experienced a double-digit surge in staff numbers across its largest Europe and Middle East offices in 2014 as profits across London, Paris, Dubai and Abu Dhabi surged by 12% to £65m.
The firm’s global managing partner Sandy Thomas said: ‘The decision to restructure was difficult, particularly because it impacts individuals who have made meaningful and positive contributions to our firm and our clients. We are providing them with resources, including severance pay and professional job transition advisory support, to help them through this period.
‘The legal industry has experienced a fundamental shift in the nature of the demand for, and the delivery of, legal services in recent years. Like all profitable businesses, Reed Smith must be attentive to market demand and industry changes.’
While the US firm has predominantly focused on building out its City offering over the past five years, the firm also invested heavily in Europe and Asia. Reed Smith launched in Frankfurt in June 2015 with seven partners from Mayer Brown; Orrick, Herrington & Sutcliffe; Willkie Farr & Gallagher; and Jones Day, and in early 2014 the firm also opened a small office in Kazakhstan centred on attracting arbitration being sent to London.
In March last year, Reed Smith posted global revenues for 2014 up 7% to $1.15bn while profit per equity partner climbed 6% from $1.14m to $1.2m, and confirmed it ‘had another strong year in 2015’ making it the firm’s fourth straight year of achieving over $1bn in revenue.