Following a major overhaul of its practice structure, King & Wood Mallesons (KWM) said in March it would axe 15% of its Europe and Middle East partnership, and make 45 business services employees redundant in London.
The move means 24 partners will leave the firm and is the second shake-up of the legacy SJ Berwin partnership in 12 months, when another 10% of the partnership across the region were asked to leave following a performance review.
KWM global managing partner Stuart Fuller (pictured third from left) said: ‘This is the most important thing the firm has done so that it is stronger and we focus on core markets and core clients and make sure we grow in the right areas.’
The move inevitably raises serious questions over the success of KWM’s 2013 union with London’s SJ Berwin amid claims from former partners that the level of expected referrals from its huge Asia-Pacific practice have failed to materialise. The firm’s managing partner for Europe and the Middle East, William Boss, resigned less than a year into the post in January to focus on client work, while in February KWM overhauled its practice structure by cutting 17 practice teams into three overarching streams: corporate finance and funds; dispute resolution and regulation; and real estate.
KWM has been dogged by cash flow problems over the last year, with delayed payments to partners, but reduced its net debt position in the year ending 30 April 2015 by nearly £1m to £15.87m. The partnership also has a £20m bank loan set to expire in July 2016, according to the firm’s most recent filing for the Europe and Middle East LLP at Companies House.
However, Fuller denied that the drastic measures showed that the 2013 merger had failed, adding: ‘I have no concerns around the balance sheet. This is all part of the firm’s 2020 strategy and making sure that the practices are aligned globally around the core business areas and getting the benefit of the merger. We are strengthening the firm and it’s actually so we can execute even better the regional and global strategy.’
tom.moore@legalease.co.uk