Meredith Connell and Lane Neave are repaying the $1 million-plus dollars wage subsidies they took to shore up their firms, but are both cutting staff as they deal with the impact of the covid-19 pandemic.
National firm Lane Neave confirmed 21 full-time staff, or more than 12 per cent of its workforce, have been made redundant as a result of covid-19.
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The Christchurch-headquartered firm blamed its struggles on the impact of the pandemic on the firm's transactions practice and the downturn in Queenstown.
Managing partner Andrew Shaw said the disestablishment of 21 full-time equivalent positions was unavoidable. Both lawyers and support staff had lost jobs.
"A careful process was undertaken with, and support has been provided to, affected staff members – and to their colleagues – through both internal and external sources," he said in response to questions.
While the firm had taken $1.11 million in wage subsidies for 162 employees, it said it was in the process of paying it back (as Sasha Borissenko first reported in the Herald on Sunday).
"Whilst the firm's business experienced a revenue reduction in the period from late March to June, it was not at the 30 per cent level required to qualify to retain the wage subsidy. We are not applying for the extended wage subsidy," Shaw said.
Meanwhile, Meredith Connell is in the middle of a staff redundancy process, weeks after repaying the government wage subsidy and announcing the acquisition of a boutique firm.
Chief executive Kylie Mooney told BusinessDesk "we are in the middle of a process so I am unable to go into any details but I can confirm this affects a very small number of staff – less than 2 per cent." She said the firm had 250 staff.
The firm took $1.6 million in subsidies for 236 staff earlier this year but has since repaid it.
The cuts have raised eyebrows, however, as Meredith Connell will add staff when it officially takes over boutique firm Prestige Law on July 1.
Prestige Law focuses on cross-border and cross-cultural litigation and dispute resolution. It took $118,044 in wage subsidies for 18 staff, the Ministry of Social Development's website shows.
It seems that picking the effects of the impact of the crisis on workflow has been somewhat difficult for firms with other firms that gave back their subsidies, such as Bell Gully, Simpson Grierson and MinterEllisonRuddWatts claiming that their initial forecasts were wrong.
DLA Piper, which did not take the wage subsidy, cancelled staff salary cuts after it found its May billings were actually not so bad.
Wider economic data suggests many businesses still expect to cut jobs. According to ANZ's preliminary business outlook for June released earlier this month, half of the companies surveyed reported having fewer staff than a year ago, and a net 37 per cent of firms still expect to cut jobs. This was an improvement from May which the bank said could reflect that many firms had already acted.