We fully recognise the impact of the global financial crisis on our clients and so have also announced today that our headline billing rates are to be frozen until further notice.

Today's announcement follows a comprehensive review of the firm's business worldwide, which we started in early December 2008.

We reached the inescapable conclusion that there is simply not enough work to keep all of our people sufficiently busy, and we do not see that changing in the near to medium term. We have therefore announced a global reduction in partner headcount of approximately nine per cent (47 partners) and we are planning a series of other measures to ensure our future competitiveness, including a proposed nine per cent reduction in the number of other fee earners globally and a similar proposed reduction in support staff headcount. 2009 pay will be frozen for all staff globally and we will continue to bear down on all other costs.

As part of this strategic review, we have also announced today that our private client practice is to demerge and become an independent firm, Maurice Turnor Gardner LLP, with effect from 1 May 2009.

We believe these steps are essential to the long term sustainability and competitiveness of Allen & Overy, our ability to continue to recruit and retain the best people and our capacity to offer the best service to our clients at competitive prices. We must act decisively to get the business to the right size, with the right skills, in the right places and minimise the need for any future similar announcements. Our priority is to maintain the morale of our remaining people and continue to serve our clients to the highest standard.

Further information

For further information please read today's announcement.