Tougher prospects for equity partnership in City boost alternative career path trend
The number of law firms offering associates alternatives to partnership has increased over the last year, with take-up likely to increase further still as firms keep a tight grip on their equity in the current economic downturn.
Legal Week’s annual assistant report shows that 37 of the 55 law firms responding to the survey now operate some form of alternative career path to partnership.
The figure, which equates to 67%, is up on last year when 59% of the responding law firms had some kind of alternative in place. Firms including Olswang and Nabarro are among those bringing in the new posts within the last year, while several others, including
Olswang human resources (HR) head Ffion Griffth said: “I imagine some firms will be tightening their equity to protect profits and, particularly if firms are full equity, you may see these roles used as a silo.
“This is not what they were designed for: people are calling for a meaningful alternative, and where there is a business case they are very important.”
The poor financial markets have also had a significant impact on assistant pay. In contrast to previous years when newly-qualifieds received bumper pay rises many have opted only for minor rises, with some opting to stick at last year’s levels.
In contrast, others, such as Berwin Leighton Paisner, have used the opportunity to narrow the salary gap by bucking the trend with larger than average increases.
With many law firms operating a bonus system based on chargeable hour targets, assistants are also seeing a larger element of their take-home pay put at risk as workloads drop off.
Targets differ markedly between firms — ranging from 1,900 at Cadwalader Wickersham & Taft in the City — down to 1,100 hours at national firms such as Shoosmiths. However, with most of the big City law firms having targets of at least 1,500, fewer lawyers are likely to attain them.
Simmons & Simmons HR manager for trainees Katharyn White said: “It will be interesting to see what happens in the next pay round, but firms should remember it is cheaper to pay a bonus to your stars than pay a recruitment fee!”
Attrition rates remain broadly similar to last year, with most firms reporting a rate of between 10% and 15%. Notable exceptions include Cobbetts, which saw a 28% departure rate, compared with between 5% and 10% last year. Since the survey was conducted in August, a number of firms have also announced redundancy consultations.
One City managing partner commented: “The boot is on the other foot right now. For the last few years fee earners have had power through their lack of supply and law firms were going to great lengths to accommodate them. Management are not concerned about their foibles any more and we will see more layoffs over the coming months.”
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Click on the link below to access the full table of results.
Assistants Survey Results