Editors' Blog
« How free-market are lawyers feeling as public solutions turn the tide? | Bursting Wragges’ bubble | Heller’s familiar fate »
Bursting Wragges’ bubble
Posted 22/09/2008 by Alex Novarese
Business is business and, for the most part, the stream of announcements of law firm job cuts seen so far have been proportionate and hard to avoid. But it’s hard to see how the announcement today from Wragge & Co that it is consulting on redundancies of as many as 30 fee earners fit into that category. For a start, the cuts are very deep for a firm with 441 lawyers. Likewise, they come after a period in which Wragges achieved revenue growth of 11.5% while profits rose by 15.8%.
But the real issue is that getting into this position did not look inevitable for the firm. For years it has been a mystery why Wragges became so hell-bent on pinning its expansion plans on property, property and more property.
Of course, while the market was booming it generated plenty of fees, but there was a clear sense that, by focusing so heavily on real estate, the firm was becoming overexposed to one area and blunting the edge of its other practice groups. With 135 lawyers drawn from that group, Wragges had ridden a property boom of its own and is now reaping the bust.
This is also a reminder that national firms have built models that are less robust than they should be to the economic cycle, especially considering full-service credentials.
The suspicion is that this round of cuts will impact hard on Wragges’ cherished reputation as a caring employer. That had already taken a knock back in the last slump after its ranks were thinned through a round of tougher appraisals. It’s debatable whether that reputation can survive at all after today.
RSSRecent Posts
Archives
- June 2009
- May 2009
- April 2009
- March 2009
- February 2009
- January 2009
- December 2008
- November 2008
- October 2008
- September 2008
- August 2008
- July 2008
- June 2008
- May 2008
- April 2008
- March 2008
- February 2008
- January 2008
- December 2007
- November 2007
- October 2007
- September 2007
- August 2007
- July 2007
- June 2007
- May 2007
- April 2007
- March 2007
- February 2007
- January 2007
- December 2006
- November 2006
- October 2006
- September 2006
Comments
I totally agree with the comment that Wragges' was too overcommitted to the property sector, and as such did not put enough resources to their departments such as corporate and pensions.
As for your last comment about Wragges' reputation as a caring employee, I would say that reputation went well over a year ago. I think that Wragges' reaction to the market difficulties with the announcement of redundancies is only further evidence of the seismic shift in Wragges' attitude to their employees.
Once renowned as a firm where the well-being of employees was celebrated, it is now a place that where the recruitment marketing is excellent but that is all. I say good luck to the 30 poor souls who will be looking for a job soon in an industrial sector which may take a few years to recover, and for the 411 souls who are still lucky enough to have a job - maybe it is time to find a firm with a real reputation for caring about their rather than one where the recruitment marketers are the real stars!
Posted by Anonymous | 23/09/2008
As an ex-Wragge & Co lawyer who left relatively recently I recall that the joke amongst lawyers going round at the time was that if you wanted job security or to be valued at non-partner level at Wragge & Co you should join the support staff team, who were employed to fill out and deal with the 'Best Places to Work'-type application forms and paperwork! They were very highly valued staff and I am not surprised that these and other support staff are not affected by these recent redundancies.
Posted by Anon | 24/09/2008
The previous comment goes to highlight how some fee earning staff see their support staff colleagues. It is also narrow-minded to not realise that support staff are just as an important part of any modern law firm.
Fee earners must be well aware of the large salary differences between support staff and their own income.
If these redunancies had been for support staff, then it wouldn't be 30 - it would have to be around 100-120 to make the same savings.
Posted by Anonymous | 24/09/2008
To the commentator on the support staff, I say the historically top-heavy Wragges team was always regarded by cyncial fee-earners as an accessory to the egos of Wragges partners. But, be warned, I saw clouds of different favourites come and go just as damaged as the hoards of bewildered lawyers who realised they were not the choosen ones after all, just cannon fodder like everyone else....
To the person moaning about property, I say it was property which carried the whole firm through the last recession, without redundancies, and you can have no idea how furious and galled they all were working late night after night, with no pay rises for a number of years and watching the then lately formed, but very quiet, corporate department, some now partners, get Golf GTIs and pay rises. It was who you knew, not what you did, in those days and believe you me, property suffered. Memories are long and I suspect the property partners have been making hay for the last 16 years and now the non-property partners will take every chance to take advantage of this reversal of fortunes.
As for cute! I saw the worst treatment of a number of loyal, long serving members of staff I have ever witnessed anywhere at Wragges, years ago, not recently. I have since worked at City firms which have fearful reputations but were honest enough to say maximising profits was their chief concern. They were much more enjoyable, straightforward and less self-conscious places to work for all that.
Wragges lost its dignified and restrained edge years and years ago. Now it just brainwashes itself, its staff and its clients into believing its own propaganda but the reality is a pale reflection of the total commitment to excellence of years ago. Whilst it has people who are excellent, that has not held universally good for years; not since critical mass became more important than quality.
So sure am I of the success of the programming, that this post will (if it is read) result in a storm of protest, even from those who have left. To them I say: one day it just happens and you see that Wragges is just the same as everywhere else with its own strengths and weaknesses. Only it is just a litte sad because it does not have the cultural humility, good sense or the vision to see itself as others see it. If it did, it might correct itself and realise that its over-preening is at times a little ridiculous.
Posted by Anonymous | 25/10/2008