A Modest Canary?

The story around Baker McKenzie's reorganisation of business services seems to have grown legs since it was first reported in Roll On Friday earlier in the month

Going back to the original article (link in the comments), it is up to 10% of business services staff at risk, not (a) 10% definitely being laid off and (b) certainly not 10% of everyone (incl. lawyers in the firm) - as I've seen others report

ROF estimate total staff of 600-100 at risk, and Legal Cheek a more conservative 600, which is around 5% of the ~13,000-15,000 global workforce at risk of redundancy

I'm certainly not wanting to minimise the impact on the individuals affected - it's a rubbish time whether it's one person or one thousand, but this is a more modest impact on the firm than some of the recent commentary has perhaps suggested

But whilst the quantum is perhaps not as significant, reference to the offshore centres being impacted does feel a noteworthy departure from Big Law's general approach of the past 15-20 years to fire in UK/US and hire in lower cost shared service centres

Baker McKenzie's follow-the-sun centres and estimated total headcount below:

• Belfast (~500)

• Manila (~1,000)

• Buenos Aires (~250)

• Tampa (~300)

Generally, larger firms have sought business services cost savings from labour arbitrage, rather than efficiency savings - e.g. take the specific £ with a pinch of salt, but fire someone on £80,000 in London and hire on £50,000 in the north of England (north-shoring), £30,000 in Belfast/Europe (near-shoring) or £15,000 in Manila/Asia/Africa (off-shoring)

Efficiency savings have been harder to come by, because these need some level of process standardisation to achieve and the lawyers to whom the services are provided tend to resist - esp. when you're looking at standardising things globally

Whilst I am generally sceptical of AI-washing ("look how innovative we are" is always a better press release than "look how we over-hired previously"), the sorts of tasks that went to shared service centres, particularly in the earlier offshoring waves, are the sorts of tasks that could be feasibly automated

Perhaps this is the (modest) canary in the coal mine

No doubt time will tell

A modest canary?