It could have been worse. That seems to be the prevailing sentiment at Allens Arthur Robinson following revelations that the firm intends to freeze salaries and offer redundancies on a voluntary basis.
"I've been speaking to other staff about it and there was a fair degree of relief about the announcement. [Managing partner] Michael [Rose] has been visiting and briefing offices in person, and video recordings are posted on our intranet, so all our staff knows what's happening. He's doing a remarkable job and has our admiration," one anonymous source told ALB.
Despite the firm's strong performance in the past year, Rose believes the market is shrinking to the extent that fewer firms are likely to remain on legal services panels, and the focus will shift from billable hours to fixed fees. "We have predicted, and been preparing for, a downturn in the legal services market. No business is immune from one of the largest recessions in living memory," he said.
Salary freezes will be effective from 1 July - not unlike that recently seen at Freehills - and profit share for partners is expected to drop. Policy changes have been made to encourage flexible working arrangements, purchased annual leave and career breaks to further cut costs. There is also a voluntary redundancy package being offered, which includes up to one year's pay for long-serving staff.
The firm has not specified how long the salary freeze will last, but ruled out any redundancy targets. "The voluntary redundancy programme has absolutely no targets in terms of numbers, positions or any specific roles in the firm - it is just one of a number of options being made available," said Rose.
Law graduates are not expected to be affected either. Rose pointed to how the firm hired 77 graduates in March and said the firm would keep hiring graduates for the next two years.