COVID-19 pushed major firms into significant staff cuts in 2020, survey finds

NRF lost the most workers and partners

COVID-19 pushed major firms into significant staff cuts in 2020, survey finds

The COVID-19 pandemic has pushed major firms into making significant staff cuts this year, the Australian Financial Review’s Law Partnership Survey has found.

Norton Rose Fulbright (NRF) reportedly made the biggest cuts of all the firms surveyed, according to LawFuel. The firm lost 14 partners – the most of any Australian law firm – as well as over 100 employees since the start of 2020.

NRF chose to concentrate on growing practices like those focusing on class action litigation and regulatory matters, dropping much of its small claims and low-value insurance practice as part of “necessary but tough decisions about the type of work we want to do and the performance that’s required,” Australia managing partner Alison Deitz said in a statement published by LawFuel.

Sparke Helmore recorded a decline of 14% in its workforce since January; rounding out the five firms that lost the most staff were Gadens (11.8%), Squire Patton Boggs (11.3%) and McCullough Robertson (11.2%).

The pandemic took the brunt of the blame for the workforce drops, which saw the biggest law firms shed over 2% of non-partner fee earners. The survey findings also showed that staff cuts were preceded by pay cuts and freezes.

“I think it’s just some normal attrition and firms being cautious about putting people on,” Allens managing partner Richard Spurio said. “However, we have a big graduate intake next year and we are hiring people in a number of areas.”

Andrew Pike, who leads Herbert Smith FreehillsAustralia arm, said he attributed the firm’s “disciplined approach to recruitment and work allocation” to the “uncertain economic outlook.”

The implementation of a “quasi hire freeze” prevented Clayton Utz from taking on the usual number of paralegals it hires at this time of year, CEP Bruce Cooper said. The firm had also been focusing on “a small amount of performance management.”

“But that’s not COVID-19-induced – it’s more fundamentally about being more rigorous on ensuring we get the talent mix right,” Cooper said.

Insurance practices get a boost

There were firms that did thrive in the current environment, largely through focusing on lawyer and paralegal hires for their insurance practices.  For instance, White & Case bolstered its roster of fee earners by 27.8%, HFW Australia by 26.4% and Lavan by 25.5%.

Insurance law specialist firm Wotton + Kearney (W+K) recorded a 37.1% increase in its workforce, due in part to the firm snapping up a seven-strong team from Sparke Helmore. A steady stream of work from pandemic-related claims, construction and weather issues also kept W+K active.

The big winner, however, was Clyde & Co, whose workforce soared by almost 80%. The firm’s strategy for the year involved deepening its relationships with corporate clients through capitalising on its insurance connections.

“That strategy has culminated in us being engaged on the Ruby Princess inquiry, the Victorian hotel quarantine inquiry and the Insurance Council of Australia quarantine test case. We have also been engaged in countless high-profile cyber breaches and other regulatory investigations,” Australia managing partner Michael Tooma said.

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