• Partners – A global reduction in partner headcount of approximately nine per cent (47 partners) and around a further seven per cent (35 partners) subject to equity adjustments. Around half of those affected are in London. This process is at an advanced stage and will be completed by the end of this financial year on 30 April 2009.
• Other fee earners – A proposed nine per cent reduction in numbers of associates or other fee earners globally. Around half of these are proposed to be in London, where the redundancy programme is likely to result in approximately 100 associates or other fee earners leaving the firm. This will be subject to local employment processes which will start immediately.
• Support Staff – A proposed nine per cent reduction in support staff headcount. Again, roughly half of these people are expected to be in London, where around 100 staff are likely to be affected. This will also be subject to local employment processes which will start immediately.
• Trainees – Current trainees and those with future training contracts at the firm are not impacted by any of these proposed headcount reductions.
• Pay - For 2009, pay will be frozen for all staff globally – fee earning and support staff alike. This will be subject to local employment law, where applicable.
• Fee rates – Acknowledging the impact of the global financial crisis on the firm's clients, Allen & Overy's headline billing rates are to be frozen until further notice.
• Demerger of Private Client practice group – As part of this strategic review, Allen & Overy's private client practice is to demerge and become an independent firm, Maurice Turnor Gardner LLP, with effect from 1 May 2009. Maurice Turnor Gardner LLP and Allen & Overy will continue to work together where it is appropriate and in the interests of clients. Staff in the Private Client group, with the exception of trainees, will be at risk of redundancy and will be consulted with accordingly.

Commenting on the moves, Wim Dejonghe , global managing partner, said, "In the rapidly changing environment in which we operate, the reality is that there is simply not enough work to keep all our people sufficiently busy and we do not see that changing in the near to medium term.  We have reluctantly taken the difficult decision to act now, from a position of financial strength, so that we can offer better terms to our departing people than might otherwise be the case.

"This plan is about the long term sustainability and competitiveness of our partnership, 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 minimise the impact on the morale of our remaining people and continue to serve our clients well."

The proposed headcount reductions are broadly proportionate across partners and staff and whilst they will be implemented worldwide, roughly half of all proposed headcount reductions, at all levels, are planned to be in London.

The cost of the restructuring will be paid out of the cash reserves of the firm. The impact on the current year's financial results is forecast to be GBP44m.

Please read the Message from Wim Dejonghe, global managing partner.

Further information

For further information please contact Fiona Gaze-Fitzgibbon, fiona.gaze-fitzgibbon@allenovery.com, on +44 20 3088 4197, or Campbell McIlroy, campbell.mcilroy@allenovery.com, on +44 20 3088 2783.