BREAKING NEWS Major high street brand cuts 1,200 jobs as sales fall by nearly £100million - with firm blaming 'challenging market conditions'
Clarks have blamed the 'challenging market conditions' during its latest financial year for the staff cuts.
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Reuters
16 minutes ago
- Reuters
Breakingviews - AI dooms the billable hour – and Big Law earnings
LONDON, July 2 (Reuters Breakingviews) - Artificial intelligence promises to save time for white-collar workers. If true, that could be bad news for companies that bill clients by the hour. Law firms, auditors and other professional-services outfits might find ways to mitigate the financial hit. But there's no getting around the fact that automation risks devaluing part of the pricey service they're offering. The 'billable hours' model dates to Reginald Heber Smith, a legendary managing partner of Hale and Dorr between 1919 and 1956, who 'pioneered the rationalization of the modern law firm', as described, opens new tab by its descendant White Shoe outfit WilmerHale. At heart, billing by the hour means getting staff to meticulously track the time spent on projects so that they can invoice clients accordingly. Beancounters and tax advisers at groups like Deloitte are also heavy users of so-called timesheets. About 82% of U.S. law firm partners' work is charged by the hour, Thomson Reuters Institute research shows, while such revenue makes up 65% of income at U.S. audit firms, according to, opens new tab the Association of International Certified Professional Accountants. Rates can be eye-popping. The most senior partners at elite firms, like Kirkland & Ellis or Quinn Emanuel Urquhart & Sullivan, can bill up to $3,000 an hour. The rate for junior lawyers can be $400, according to LexisNexis's Sean Fitzpatrick, or sometimes much more at White Shoe firms. It's normal, opens new tab in Big Law to charge out juniors at multiples of their salaries, which can be a nice earner for the top partners. But AI, particularly so-called AI agents which work autonomously, are now threatening to undermine the time-honoured practice. Goldman Sachs analysts estimated, opens new tab in a 2023 report that 44% of legal tasks in the United States could be automated. It might sound like a good thing that an AI agent could draft a non-disclosure agreement in minutes, or instantly synthesise board minutes for an audit. Yet a perverse outcome of the billable hour structure is that being more productive, all else equal, can mean generating less revenue. According to American Bar Association guidelines, opens new tab published in July, lawyers can only charge for actual time spent on tasks, even if AI allows them to perform them faster. Compounding the problem is the fact that professional-services firms may face a chunky upfront IT bill to get the new software up and running. Only one-third of tax firms surveyed, opens new tab by Thomson Reuters reckon they can directly pass on generative AI investment costs to customers, implying that developing or buying slick new AI agents will initially eat into profit margins. There are no painless ways to respond to this double whammy. One extreme option, in theory, would be to let AI agents replace a big chunk of the junior staff. Clients pay partners for their wisdom and personal touch, not the grunt work. The implication is that seniors could keep charging themselves out even if the rest of the firm becomes populated by faceless AI robots. And to the extent that some juniors spend time on work that can't be billed, agents could boost profitability. Associates, who are generally younger members of staff, are already shrinking as a proportion of law-firm headcount – to 40% in recent years compared with 45% from 2005 to 2009, according to Thomson Reuters, opens new tab. One problem with this option, other than its heartlessness, is that firms need a constant pipeline of juniors to repopulate the partnership. Who else will replace the old guard when they finally cash out to hit the golf course full time? It's also far from clear that the hallucination-prone software is ready for the big time, implying that a horde of associates may still be needed to check AI agents' accuracy. That points to a different solution: moving away from billable hours. It's already happened at the elite strategy consultancies like McKinsey & Company, Bain & Company and Boston Consulting Group, who often charge flat project fees tied to specific outcomes. Doing the same would flip the AI equation for law and accountancy firms: productivity improvements could boost margins rather than hurt them. There's a precedent in the legal world too: Allen & Overy in 2002 created a subscription-based business called Aosphere, whose lawyers give advice online to 1,200 clients. 'We don't even do time sheets', its website claims, opens new tab. Buyout shop Inflexion and Endicott Capital agreed to invest in the division in 2023 at an unspecified valuation, suggesting that the model may hold some promise. But it's a different type of service to advising on a complex deal or piece of litigation. The risk is that it will be tough to systematise pricing across the vast variety of projects. Doing so might be easier for beancounters, since audits can in theory share a common overarching process. But no two lawsuits, for example, are the same. Switching to a project-fee approach puts the onus back on professional-services firms to judge how many resources a clients' work will take. The bigger problem, however, is that automating tasks makes it harder to charge a margin. Under the classic law-firm model, for example, revenue gets split equally three ways between overhead costs, salaries and partner profit. The implication is that seniors should charge juniors out at a minimum of three times their pay. Yet clients may balk if Big Law tries to apply the same logic to an AI agent. Why should a White Shoe firm add a markup to software that it just bought from someone else? Corporate clients could argue that they could just get their own AI agents instead. It's a management challenge that Hale and Dorr's attorney mastermind Reginald Heber Smith would probably have relished. Solving it will require moving beyond the billable hour. Follow Karen Kwok on LinkedIn, opens new tab and X, opens new tab.
Times
23 minutes ago
- Times
Class clubs — the must-have golfing accessories
'Someone once told me that there is more to life than golf,' Bruce Lansky said. 'I think it was my ex-wife.' As aphorisms go, this one feels perennial, especially after a cursory glance at the obsessions of golfers. Golf has always been a game of codes — some written (USGA rules), some whispered (don't wear white belts after 40, or perhaps before 40 too). Nowhere are these codes more quietly ostentatious than in the world of accessories. Handicap be damned — this is a look at the things in golf that no one really needs, but everyone quietly wants. This article contains affiliate links that can earn us revenue No matter who I spoke to about golf gizmos, there was a consensus that range finders were the dernier cri for golfers. What I didn't expect was the level of nuanced politics that surrounds them. You have to think of it a bit like shooting, where the scruffier the outfit, the smarter the family — regular guns don't have time to replace their tweeds. So too is it with these range finders. Members at Swinley Forest Golf Club — the Pratt's of golf clubs, an establishment for the Corinthian man, proud of his amateur status, which is marked only by a postcard-sized sign at the entrance of its driveway and obscured by a membership omerta — are happy to stick to entry-level Garmin watches that simply say roughly how far it is to the hole. At a push they might use a Bushnell handheld one. Turn to Sunningdale or Wentworth, home to the sharpest of elbows (getting membership there requires no little hustling), with all arms of the financial world converging — along with all the competitiveness that comes with it. Garmin also provides for this demographic, with the Marq Golfer watch, coming in at £1,700. This seems to be able to do everything except control the ball once hit. It includes 42,000 preloaded courses, club recommendation, wind speed, contour data, jet-lag adviser and, the best bit, a stock tracker so you don't miss a tariff when on course. What a world! One pro said to me, 'To be honest, it really depends on what kind of golfer you are wanting to be.' Presumably the word 'golfer' is, in this case, a polite euphemism. This is a fairly easy one to pick from the crowd, like finding a needle in a haystack but the needle is 4ft long, 1ft wide and made by Loro Piana. Very few bags pass the £2,000 mark, and this is from brands such as Tumi with mark-ups at Harrods, where most still come under £1000. Then there is Loro Piana's bag. There is a perfectly reasonable debate to be had as to why you needn't spend £14,500 on a golf bag, but as is the brand's wont, it is aesthetically very pleasing and I guarantee every golfer has pondered whether it is the final piece in their perambulatory puzzle. In this instance it is fair to say that most people move within the Titleist, TaylorMade or Callaway orbit. You will usually be able to get a set of irons for between £1,200 and £2,000, with the Callaway Apex at the top end of this. However, things can start to get really expensive when you look to Japan for clubs. Miura (such as the MB-101) is for the gold purists (£2,000-£4,000 for a set, similar to the American brand PXG), while Honma clubs can be so aesthetically outrageous, with gold and platinum detailing, that it's hard to know exactly who it is for; its five-star limited-edition sets can come in at over £30,000. Wishing to stand out does not need to be so expensive — Kyoei copper clubs are £1,900, while the Finnish brand Takomo's highly rated 101 clubs look superb and cost less than £500. When it comes to putters, the truth is that people can fuss and debate, but if you have a Scotty Cameron putter then you have the trophy putter and all else is white noise (roughly £500, depending on the model, but Tour versions can be up to £25,000). All things considered, golf attire is far from lavish. It's perfectly reasonable for the clothes to be practical; golf after all is a sport that requires maximum range of movement whether in scorching heat or driving rain. The fanciest golf clubs require a collar but any old polo shirt counts. To be frank I feel there is a gap in the market for people to put real thought into golf kit design. For a sport that is all about hip movement, golf apparel seems to be allergic to pleats on trousers and wants to be as restrictive as possible. I am struggling to find an exception, from Holderness and Bourne to Peter Millar and Greyson Clothiers. Technical tops with some form of gilet are ready-made for the finance bros who spend so much of their time on the golf course (see range finders). If you are of a vintage disposition, then try Oldfield Outfitters. This is a range seemingly plucked straight out of the 1920s, all of it created as an antidote to the homogeneity of golfing attire. Alas, the days of the kiltie have gone. The large leather fringe sitting on top of the facings (see Sean Connery playing golf in Goldfinger) were designed to stop grass from getting into the shoe, and while you still see them in the women's game every so often, men eschewed them long ago. One brand has stepped up and cornered a bit of the shoe market. G-Fore has done something revolutionary and, wait for it, catered to its customers, rather than try to create a rigid design identity. Shoes range from models that look like tennis shoes to old-fashioned Derby brogues. Naturally the brand has been accosted for collaborations by the likes of Mr Porter (as part of the Mr P range). It is now under the Peter Millar umbrella (which is to golf what Umbro is to football), owned by the good folk at Richemont. If accessories are add-ons and therefore by nature surplus to requirements, then there can be nothing more unnecessary and therefore critical then a loft conversion for the sole purpose of installing a golf simulator in your house. Golf simulators had their initial bubble 40 years ago in Japan, where they had relatively few golf courses at the time, so simulators were stacked like vending machines for people to be able to play instead. These are catching on in the UK, both in private homes and clubs — such as the new Nexus club in South Kensington. However, where they are really taking off is in Dubai. The land of milk, honey and expats is, as you can imagine, unplayable for eight months of the year due to the inconsiderate temperature. You can't keep golf devotees down, though, and they are taking their habits indoors. Golf course alleys, like bowling alleys, where you pay per hour around a simulated version of any golf course in the world, are all the rage. My twin brother, Joe, lives in Dubai working for an ultra-prime residential developer, and suggests that they have become home essentials. 'As the hot weather sets in, Dubai golf fanatics, who for eight months of the year are spoilt by local access to some of the best courses in the world, are now hibernating in their home golf simulators,' he says. 'The top-of-the-range units allow players to finesse their golf swing, play most championship courses globally, and double as indoor cinemas. A fully installed set-up like this can easily break £100k.' The competition in this area seems to be increasing, but to make things easy for you, might I suggest taking Tiger Woods's lead and installing a Full Swing Golf Simulator? It is important to remember the small things too — in for a penny, etc. Actually, that is a good place to start, because while a penny has been used for many years as a perfectly sufficient ball marker, why not turn to Seamus Golf, where you can get forged copper and steel versions (average £30), green menders and divot shanks (both £69). Woods come with a cover, a kind of leather sock, but you can also be frivolous here and Lucrin is a great option. It is a superb leather accessory brand with plenty for work and home, but also has driver covers in suspiciously-similar-orange-to-Hermès-orange for £189. Completely unnecessary and therefore worth considering is the Renzo Romagnoli travel set (£850), which includes a putter that can be disassembled into four pieces. It's as close to The Day of the Jackal as most of us are going to get. Even your tee peg game can be elevated with Green Swing bamboo golf tees (£5.99 for 30).
Times
24 minutes ago
- Times
Why the pension death tax could destroy thousands of family businesses
Thousands of family firms face being wiped out by a little-understood tweak to inheritance tax rules, experts say. The move by the chancellor, Rachel Reeves, to charge death tax on pensions could force the liquidation of businesses, jeopardising jobs and the broader economy, according to the wealth manager Evelyn Partners. It said that about 15,000 businesses are at risk. From April 2027 unspent pension assets will be subject to inheritance tax and, crucially, pension schemes will have to settle their share of the tax bill within six months of the pension holder's death. This shift, which was revealed in the autumn budget, will hit business owners who have held commercial property — such as company premises, workshops or machinery — within their self-invested personal pensions (Sipps) or small self-administered schemes.
