The UK’s elite law firms often point to their rigorous partnership promotion process as a natural selector of the best talent but at Freshfields Bruckhaus Deringer and Allen & Overy (A&O) the promotion of just 15 and 16 partners respectively in recent weeks is insufficient even to maintain the partnerships at their current levels.
For Freshfields, the latest promotions round is a marginal increase on the 14 promoted in 2013, but is a significant decline when compared with the 20 partners promoted in 2011 and 2012.
A&O, meanwhile, promoted 19 lawyers last year, compared with 23 in 2012 and 21 in 2011.
On the basis that firms need to promote around 5% of their partnerships annually to account for normal retirements and partners leaving, Freshfields’ latest promotion round represents just 3.6% of its total partnership of 421, while at A&O, that figure is 3% of its larger partnership of 528. Both A&O and Freshfields promoted five lawyers in London.
Freshfields’ senior partner Will Lawes told Legal Business: ‘When we make up a partner, we assume he or she will be with us for the next 25 years, so we make decisions every year based on our judgements about how and where, in terms of skill set and geography, we want to support our business over the next 25 years. We also look for partners who will be nimble enough to adapt to changing markets.’
A&O senior partner David Morley said: ‘Partner promotion is a long-term investment decision and intakes simply vary from year to year. Overall levels have understandably settled lower than during the boom years given the lower long-term growth forecasts for the legal market.’
‘Partner promotion is a long-term investment decision and intakes simply vary from year to year.’
David Morley, Allen & Overy
Slaughter and May this year bucked the trend and its own previous promotions by making up seven lawyers: its largest promotion round since 2006, representing 6% of its partnership of 117.
The remainder of the Magic Circle are expected to release their figures this month. Clifford Chance last year made up 20 partners, while at Linklaters that figure was 24. As a percentage of their total partnership that is a figure of 3.5% and 5.4% respectively.
Scott Gibson, founder of legal recruiter Edwards Gibson, commented: ‘Business cases have become more difficult to justify and many firms are moving closer to an all-equity partnership making it harder for lawyers to make partnership.
‘Now the economy is improving, we may see a slight improvement around equity capital markets and real estate practice areas, although there is still an oversupply of senior lawyers at Magic Circle firms.’
The promotions also come as the larger US firms are, in many cases, promoting an equivalent number of partners in London. In the most recent rounds Latham promoted four partners in its City base; White & Case promoted five and Kirkland & Ellis promoted seven London partners.
One senior partner at a US firm in London said: ‘It’s great for firms like us, as we get highly trained associates, where we haven’t had to pay for the training, and they move on to become partners and heads of departments.’