Allen & Overys (A&O) banking department has issued an ultimatum to its corporate partners to get their house in order after the London corporate group recorded a net loss of 10m in the last financial year.
A&O sources told The Lawyer that, during a stormy meeting in May this year, the representatives of the corporate group were told to produce a strategy to improve the business by December this year.
Confirming the meeting, one source said: Some people in the banking practice will get more forceful in their demands for change. If nothing happens theyll require management intervention.
A&Os London banking group has 54 partners, the same number as in corporate, but is understood to generate two and a half times the amount of revenue. The average profit at A&O last year was 609,000.
One source close to A&O said corporate needed to cull dramatically its partners, but that the problem was intract-able after a senior M&A lawyer had ruled out any reduction.
An A&O partner said: Banking is a milch cow thats being squeezed every year and the people are working harder and harder. Theres just not an acceptance within the corporate practice that theyre chasing a dream thats unattainable Were not just principals in this business, but investors in it.
Managing partner David Morley said: We have meetings all the time. Some are more heated than others. Undoubtedly, corporate has had a tough time over the last three to four years, but things are coming back. Part of the model is to have a breadth of business so youre not overdependent on one market.