Freshfields' fresh faces should watch Slaughters, not Links

How convenient of Freshfields Bruckhaus Deringer and Linklaters to unveil their partner promotions on the same day (see Freshfields story, and Linklaters here). The two firms are so often compared with each other – and indeed so often compare themselves with one another – that it makes eminent sense for them to unveil this important news within minutes of each other.

It wasn’t always thus. Last year Linklaters got its news out a day earlier than Freshfields. Then again, back in April 2006 Linklaters had significantly more to shout about than its magic circle rival, given Freshfields’ decision to promote just 10 partners - less than a third of the number then being admitted to Linklaters’ partnership.

Freshfields’ miserly partner intake in 2006 was a source of considerable surprise at the time, given the buoyant state of the M&A market. In retrospect, it signalled the starting gun for a year of upheaval as the firm embarked on an unprecedented partner culling programme.

The figures tell it all. This time last year Freshfields’ partnership stood at around the 500 mark. This year, once its 22 new partners have joined the fold, the firm will have 450 partners. And, for the first time, Freshfields will not boast an all-equity partnership.

Freshfields’ shake-up fuelled expectations that the firm was preparing the way for an injection of new talent. And, to an extent, this has taken place. In 2006, its new intake represented 2% of the partnership. This year that proportion has more than doubled to 4.8%.

However, Linklaters’ tally of 7% confirms that the Freshfields shake-up was not simply about clearing the decks for new talent.

Keeping a relatively tight hold on a smaller pool of equity partners spells for a significant boost in profits per equity partner (PEP) this year. And not a moment too soon, as far as management is concerned, given Linklaters’ commanding lead in the average PEP stakes.

The third part of the equation was a desire to rebalance the firm towards the practice area in which it excels most.

Here the message contained in the latest partnership round is mixed. The proportion of corporate partners to have made the grade this year has actually slipped, from 60% in 2006 to 41% in 2007. These figures should, however, be treated with some care, as the finance and commercial teams bore the brunt of the 2006-07 cull. 

It is nevertheless striking that Freshfields has seen fit to promote just four London corporate partners over the past two years, a time when it has dominated the M&A rankings.

Interestingly, Freshfields’ London partner promotions in 2007 closely resemble those of its other great London M&A rival, Slaughter and May.

Both firms promoted just five partners in London, of whom two were in corporate. This suggests that up-and-coming corporate lawyers at Freshfields’ London headquarters should play closer attention to what goes on at One Bunhill Row than to the current largesse on display at One Silk Street.

john.malpas@legalweek.com