Our cover feature this month largely speaks for itself in assessing the changing face of partnership as Millennials begin colonising the senior ranks of City law firms. Within five years, this group will be the driving force of elite commercial advisers.
Yet this column is not about the changing attitudes of youngish lawyers, more an issue that touches so many topics in the pages of this magazine, spanning remuneration, strategy, governance and talent. Quite simply, that is the success – and much more often failure – of leading law firms in balancing the interests of their younger ranks with their older partners.
As with society, intergenerational fairness has become an increasingly pressing issue in the upper reaches of City law, though one that has gone strangely unremarked. Given the ownership structure of law firms, it is understandably claimed that the interests of associates and partners are neatly divided as shop floor and management. In reality, UK law firms operate in three distinct camps: the youth of trainees and young associates, a middle vintage of experienced associates and new partners and, finally, older partners. The attitudes, outlook and incentives of the three camps not only hugely differ, they at times directly conflict.
The interests of a partner in their late 40s on fundamental issues like compensation, investment, technology, globalisation and strategy are totally different to a 30-year old associate hitting their prime. The veteran’s mind inevitably starts to turn to life beyond that institution while the associate is facing long-term, career-defining decisions, including hazy considerations about what kind of an industry the law will be in 20 years.
The profession pretends too readily that older partners – for all the virtues of experience – are not frequently gripped with short-term considerations favouring their drawings over decade-spanning investment and planning. And it remains possible to be a strong supporter of both partnership and lockstep-derived compensation structures as economic constructs, while concluding that the specific model that has evolved at leading London law firms has aggravated such intergenerational conflict. There have been too many big decisions at leading law firms that have been blocked by older partners that were plainly not in their personal interests but would have benefited the firm.
US law firms as a breed have their flaws but one of many reasons so many young City partners decamp to US rivals is they feel, with some justification, that these are more meritocratic outfits and attuned to their interests than London peers in hock to one camp.
None of this is meant to diminish the contribution of older partners – the strictures of City law means leading firms have somehow often oxymoronically managed to poorly serve youth and late middle age at the same time. The solution is not to make 30-somethings the new kings and relegate grey hairs to serfdom. But a more thoughtful attempt to balance these constituencies would not only breed stronger institutions, it would make it easier to push through measures senior management knows full well are required but near impossible to ratify.
To end on a concrete proposal, there is a strong case to bring senior associates far more into governance structures, including offering full voting rights in some matters. Ultimately, all businesses prosper with a deft balance of those with an eye to the future, while others attend to business right now.