Restructuring is becoming increasingly common across the professional services sector, particularly where firms need to streamline operations, consolidate departments or adapt to shifting market conditions. Whether you’re a law firm, accountancy practice, consultancy or financial services business, managing redundancies fairly and lawfully is critical – not only to reduce legal risk, but also to protect your firm’s reputation and retain trust among employees and clients.
This guide explains how redundancy consultations work, what the law requires, and how professional services firms can deliver a transparent, compliant and well‑structured process.
1. Understanding When Redundancy Applies
A redundancy situation arises when a role is no longer required due to business closure, relocation, reduced need for particular work or structural changes in how work is delivered.
Redundancy must relate to the role, not the individual – dismissing someone where the job still exists exposes the firm to unfair dismissal claims. A change in job title is not sufficient, it is the underlying role that is assessed.
In professional services firms, this might occur due to:
- Consolidation of service lines
- Automation or technology adoption
- Merging teams or offices
- Shifts in market demand for certain practice areas
2. When You Must Consult Employees
Consultation is a legal requirement, and the rules depend on how many redundancies are proposed:
Fewer than 20 redundancies
You must hold individual consultations with each affected employee. There is no statutory minimum consultation period, but the process must be meaningful and genuine.
20 or more redundancies within 90 days
You must hold a collective consultation with employee representatives (either trade union or elected reps), as well as individual meetings.
Collective consultation must begin in good time and meet minimum timeframes:
- At least 30 days before the first dismissal (20–99 redundancies)
- At least 45 days before the first dismissal (100+ redundancies)
You must also submit the statutory HR1 form notifying the Secretary of State. The form has been updated and must now be completed digitally.
3. What a Redundancy Consultation Must Cover
The consultation process must be meaningful, not a tick‑box exercise. Core topics include:
- The reasons for the proposed redundancies
- Ways to reduce or avoid redundancies
- The selection process and criteria
- Timescales and next steps
- Support available, including redeployment opportunities
- Time off to look for new work or training
Employees can ask questions, challenge decisions and suggest alternatives. Employers must listen with an open mind and genuinely consider feedback. Employers are not however required to reach agreement with the employees.
4. Selection Criteria: Fair, Objective and Non‑Discriminatory
Professional services firms must ensure selection is based on transparent, business‑justified criteria such as:
- Skills and qualifications required for the roles being retained
- Performance records
- Attendance (using objective data)
- Relevant experience and capability
Criteria must be applied consistently and must not discriminate against protected groups (e.g., age, disability, gender).
A selection matrix helps maintain fairness and defensibility.
5. Communicating Clearly and Transparently
Clear, early communication is essential to maintaining trust and reducing uncertainty. Firms should explain:
- Why restructuring is happening
- Which areas are affected
- How many roles are at risk
- What the consultation process will look like and expected timelines
- Potential alternatives (such as voluntary redundancy or internal redeployment opportunities)
Professional services firms, where culture and reputation matter greatly, benefit from communicating openly with both staff and (where relevant) clients.
6. Key Legal Updates Affecting Redundancy Consultations
The Employment Rights Act 2025 has increased scrutiny on redundancy processes and introduced tougher consequences for non‑compliance.
a. Increased Protective Award (from 6 April 2026)
Failure to properly consult in collective redundancy scenarios could now cost firms up to 180 days’ pay, double the previous 90‑day maximum.
b. Future threshold changes (expected 2027)
A new, additional threshold will require collective consultation where a specified number/percentage of redundancies happen across the entire employing entity – even if not in one establishment. Details are pending, but firms with more than one office should plan ahead.
c. Increased enforcement
A new enforcement body, the Fair Work Agency, launches in April 2026 to strengthen oversight of employer compliance.
7. Running the Process: Step‑by‑Step for Professional Service Firms
Step 1: Plan the restructuring carefully
Identify business reasons, roles affected, and alternatives to redundancy.
Step 2: Notify and prepare
Prepare consultation documents and, if necessary, begin the election of employee representatives.
Step 3: Begin consultation early
Hold group briefings followed by individual meetings. Allow time for meaningful dialogue.
Step 4: Apply selection criteria fairly
Document decisions clearly, use objective data, and cross‑check for bias.
Step 5: Explore alternatives
Consider redeployment, reduced hours, job‑sharing, or voluntary redundancy.
Step 6: Confirm outcomes
Issue redundancy notices, ensuring proper notice periods and statutory redundancy pay.
Step 7: Provide support
Offer job search assistance, references, wellbeing support or career transition services—especially valuable in professional services environments where reputation and industry networks matter.
8. Final Thoughts
Restructuring in a professional services firm is uniquely sensitive: roles are often specialised, client relationships are personal, and morale is critical to maintaining service standards. Running a robust, transparent and fair redundancy consultation isn’t just a legal requirement – it’s an essential part of protecting your people and your firm’s long‑term reputation.
If you are considering restructuring your firm please speak with one of our team of specialists on 0345 646 0406 or complete our online enquiry form and a member of the team will be in touch.