Organisational change and review

As a business in a highly competitive field, we have to respond and adapt to commercial pressures. This imperative drives a need for periodic reviews of the structure of our business. Our clients rightly expect us to be efficient and to keep our costs under control.

During 2006/7 we implemented a number of structural and organisational changes designed to make us more competitive, which had an effect on our people. Our approach was to engage individuals and groups in the process of change and to support individuals who were affected. These changes resulted in the departure of a number of partners, as well as a reduction in people in our business services departments.

We did our best to be sensitive and generous to those who left the firm as a result of these changes, and this remains our guiding principle when dealing with such matters, irrespective of the level of the individual. We offered career coaching to all those affected. Through the support that was provided, building on the quality of the experience gained in the firm, many of those affected found roles outside the firm.

Engaging our people in change

We recognised that such period of change, however well motivated and successfully implemented, gives lead to unease among our people. There were concerns about whether the organisational changes would give rise to a firm with different values and a different culture. To deal with people’s concerns we recognised the principal – and perhaps – only way to give this message effectively was to engage in increased dialogue with the people who work here, to explain to fee earners and business services alike the goals and challenges ahead and to underline the firm’s continuing values and commitments, notwithstanding the organisational change.

This process has been well received, with the establishment of associate engagement groups and with question and answer sessions between senior management and each of the departments. As time passes, we hope the continued success of the firm has helped to reassure people. However, we recognise that ongoing dialogue is essential to the development of the firm and to providing continuing reassurance in light of the recent changes.

Reviewing our systems

As part of our strategic review we have introduced several new systems. For example, we have updated our knowledge management system and adopted a new electronic filing system and a new client relationship management tool, all to help us manage and share information even more effectively.

We have introduced a fixed share partnership scheme. Whereas previously all partners received a share of equity in the firm, now those who are fixed share partners will receive a mix of fixed and variable compensation. New partners will generally enter as equity partners, but the ability to offer fixed shared partnership in certain situations will, we believe, give us greater flexibility to develop offices and practices.

We have also reformed our partners’ pension scheme to make it fairer and more sustainable for younger and future partners while protecting the position of partners close to retirement. We were the last large City law firm with such a scheme and had previously considered amending it. In 2006, after considerable consultation and internal debate, the partnership voted overwhelmingly in favour of the reforms.

It is recognised that some partners were unhappy with the terms of the reforms but we are satisfied that they were both necessary and fair for the majority of both current and future partners. Such decisions have to be made for the continuing good of the firm and to ensure that our associates and younger partners are sufficiently incentivised to remain with us.

Office changes

In spring 2007, we reorganised our Asia resources by transferring to Hong Kong our Singapore-based practice servicing clients in south-east Asia. This was in line with the shifting patterns of demand for legal services in Asia, driven by the growing maturity of Asia’s economies and the effect of China’s growth on client activity in the region. As a result, we no longer have an office in Singapore. Both partners and the majority of the legal fee earners relocated to Hong Kong. People in business services who did not relocate were provided with financial and other support.

From November 2007, our Budapest office began operating as an independent firm under the brand Oppenheim. As a result, the Budapest office is no longer part of our network but our relationship continues, with the office being a preferred partner for servicing our international clients in Hungary.

For these reasons, and for reasons of consistency, the data in this corporate social responsibility report does not include information on Budapest or Singapore. However, we have taken into consideration the greenhouse gas emissions of these offices in terms of offsetting and estimating our total tonnes of greenhouse gas emissions for 2006/7.