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Coronavirus measures pay off for Reed Smith as revenue tops $1.3bn

Despite starting the financial year by reducing partner drawings in response to the pandemic  as well as other cost-cutting measures, Reed Smith has unveiled a respectable set of results that saw global revenue rise to over $1.3bn.

Overall revenue increased 5% from last year’s $1.25bn to $1.31bn this time around, while revenue per lawyer jumped 4% from $778,000 to $811,000. However there was a striking 16% uptick in profit per equity partner (PEP) from $1.3m to $1.5m which, combined with the firm’s 48 lateral partner hires in 2020, underlined the robustness of the results.

Reed Smith global managing partner Sandy Thomas told Legal Business that London-specific financials were flat on last year, but emphasised ‘London’s capabilities, resources and contribution to the firm’s overall performance was incredible’. He added: ‘The baseline performance of the firm is built on our expertise in key sectors. With that in mind, the relevance of London is huge.’

Among London’s headline contributions in the past year, disputes partner Peter Hardy advised on one of the very first fully virtual trials in April, in a $530m multijurisdictional Commercial Court dispute. In other key mandates globally, in the US the firm advised Microsoft on its buyout of telecoms business Metaswitch Networks.

The firm can certainly be forgiven for being overcautious when the pandemic hit a year ago, but even in context the firm’s 40% reduction in monthly drawings for equity partners and 15% cut for fixed share partners seemed particularly austere.  This was in addition to other austerity measures, including pay cuts for lawyers and staff, reductions in working hours, furlough and redundancies.

Thomas commented: ‘We did what was best for Reed Smith at the time, rather than stick our fingers in the air and follow the industry. We were among one of the first firms to go fully remote, across all our global geographies. I didn’t account for the speed at which the firm successfully pulled together.’

Thomas concluded: ‘I feel optimistic for 2021. Our global transactional pipeline looks very good, and there’s already a high level of contentious work in all our regions. But time will tell.’

Norton Rose Fulbright cuts 132 roles — majority in London

Norton Rose Fulbright’s London office

Norton Rose Fulbright (NRF) is to cut over 130 roles across its Europe, Middle East and Asia offices, it confirmed on Friday, with London taking the biggest hit.

The international law firm is to make 114 staff redundant in its London HQ, including 19 associates and counsel. The vast majority of cuts affect secretaries and business services staff.

“We have taken the decision to restructure our business services operating model to set us up to lead and thrive in a period of change and uncertainty,” Peter Scott, EMEA managing partner said. “Our resilient performance over 2020 allows us to make these changes now.”

He continued: “Our new operating model will help us serve our clients as effectively and efficiently as possible. Unfortunately, a number of colleagues who have made important contributions will leave us. We have followed a process that is as fair, robust and sensitive as possible, to bring a swift resolution.”

In the wake of the pandemic, a number of major legal players have made job cuts.

In December, Addleshaw Goddard cut 19 lawyer roles across its UK offices following a redundancy consultation, while Reed Smith made thirteen lawyers and six support staff redundant last summer. Other firms to make cuts include Bryan Cave Leighton Paisner, Shoosmiths and Squire Patton Boggs.

Reed Smith Launches Global Racial Equality Task Force

Reed Smith has become the latest major law firm to launch a global racial equality task force, the firm announced in a statement.

Comprising a 36-member committee, the new racial equality task force comes in response to “recent global events that have brought to the fore generations of systemic racial injustice against Black people and other ethnic minorities,” the firm said.

As part of the move, the firm intends to set improvement measures in the hiring, retention and promotion of Black and other ethnic minority lawyers and staff working at the firm.

Global managing partner Sandy Thomas will chair the task force, which also comprises the firm’s seven-member senior management team, as well as other lawyers and professional staff, according to the statement.

The task force will carry out the firm’s newly-instated racial equality action plan (REAP) which aims to “re-imagine organisational business practices and habits to promote racial equity.”

The REAP is designed also to help the firm improve fairness and well-being for Black people and other ethnic minorities working at the firm, and to solicit ideas on how to uphold racial equity; pursue pro bono engagements “with the specific goal of advancing a more equitable society”, and to carry out work in criminal justice reform and voting rights.

Thomas said in a statement: “Striving toward racial equity is critically important as we move our communities forward. As stewards of the law, it is our responsibility to ensure that the credo of ‘equal justice for all’ is pursued and applied every day, to help provide a voice to all people.

“Our commitment is inspired by people from across the firm and is led from the top. We are proud to declare who we are and what we stand for – and on an issue of such importance, we do so unequivocally. While we appreciate that there are limits to the contribution one law firm can make, we are determined to realize change wherever possible.”

The move follows that of Baker McKenzie, which established a global race and ethnicity task force in July. Allen & Overy also implemented new ethnicity targets and a race ‘stay gap’ that same month.

HK PHOTO

Up to 40 staff may be leaving Reed Smith in HK

Denise Jong, the APAC managing partner of Reed Smith Richards Butler, has confirmed that up to 40 people could be leaving the firm soon, including partners, fee-earners and secretaries.

While the exact number is still up in the air, Jong confirmed to Leaders in Law that the firm is aware of the intentions of David Morrison and five other partners from the firm’s Hong Kong-based disputes team to join MinterEllison in January next year.

The other partners are believed to be William Barber, Alex Kaung, Eddy So, Nathan Dentice, and Desmond Yu. MinterEllison could not be reached for comment. In a media release supplied to ALB, Jong said that conflicts in any law firm “as large and complex as Reed Smith” are a fact of life.

“It is inevitable that, over time, certain representations taken by the firm pose issues for litigators whose clients might need to be adverse to an industry focus of the firm,” she said.

“Our Hong Kong office has a strong and diverse litigation group, as well as a leading corporate group in Hong Kong and Asia. Notwithstanding the departures, we will continue to have 20 partners and, in total, about 100 fee earners in our Hong Kong office, one of four offices in Asia.”