Redundancy in international firms has become a norm in the current environment and their China offices are not immune. According to this year's ALB50 statistics, headcounts at many leading international firms' Greater China offices have contracted compared to last year's figures. Official announcement regarding the layoffs, however, are few and far between.
DLA Piper first broke the silence by announcing Asia job cuts in March this year. Now, Baker & McKenzie has announced its plan to cut back 11% of its fee earners, together with a commensurate number of secretarial and support staff, across its Hong Kong, Beijing and Shanghai offices. It has become the first major international firm to be open about its layoffs in China offices.
The firm told ALB China that "these difficult measures are necessary to ensure our ongoing financial health in an increasingly competitive environment".
The firm also noted that the current economic climate is proving very challenging for most businesses, including many of its clients, and it is facing one of the broadest global recessions in decades and this is inevitably affecting the legal profession.
Currently, Bakers has 281 partners and lawyers in Hong Kong and the mainland offices. An 11% cut means around 30 fee earners will lose their jobs, and the rumours are that many of these are at entry level.
Meanwhile, the firm also announced five new partner appointments in China. The newly elected partners are Joseph Deng in Shanghai, Barbara Li and Scott Palmer in Beijing, and Eugene Lim and Jennifer Van Dale in Hong Kong.
Deng and Van Dale both have a focus on labor and employment law issues, Li on construction and infrastructure projects, Palmer on IP, and Lim on customs, indirect tax, and international trade matters.
"The new partner appointments reflect the continued growth of our practice across specialist areas, providing us with a solid platform to assist our clients with the challenges they are facing in the current economic environment," said David Fleming, Baker & McKenzie's managing partner for Hong Kong/PRC/Vietnam. Although this seemed to contradict the firm's statement regarding the layoffs, recent changes in Bakers' China offices do reflect the changing pattern of client demand in the market.
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