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UK law firms are losing junior talent by retaining senior partners

Firms need to provide associates with stimulating and developmental work

8 August 2012

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By Manju Manglani, Editor (@ManjuManglani)

One in three lawyers think their career progression is being stifled by a lack of opportunity within their firms, a recent survey has found.

A bottleneck of lawyers has been created, with an increasing number of associates competing for partner positions while senior partners are staying with their firms for much longer, according to Law Society data.

“Not so long ago, it was perfectly feasible for associates to have a real prospect of partnership and for partners to expect to spend their whole career at one firm. But this is no longer the case,” said Jill King, the former global HR director at international law firm Linklaters.

“Many of today’s young workers feel resentful that the baby boomers somehow squandered their inheritance, and many of today’s young associates believe that partners are pulling up the drawbridge to partnership behind them. 

“The associates of today are not prepared to wait for the deferred and uncertain reward of partnership. They want the sort of early responsibility that is hard to access in private practice. 

“If they actively listened to their associates, partners would learn that associates are not adverse to long hours or hard work, but that they want that work to be stimulating, developmental and purposeful.” (See Generating leaders: Why you should embrace the priorities of Gen Y)

The number of partners retiring from UK law firms has dropped by 30 per cent over the past 15 years. And, since 1990, the growth in the number of solicitors (89 per cent) has been more than double the growth in the number of partners (40 per cent).

“We’re seeing a clear divide between those who feel their best chance of reaching partner lies in attempting to rise through the ranks at their current firm, and those who feel that staying at their firm may narrow their options,” said Guy Adams, co-head of private practice at legal recruiter Laurence Simons, which conducted the survey.

The survey found that the average partner in the UK’s top 28 firms is aged 44 and has been with his current firm for 11 years, indicating that most partners have not joined their current firm at partner level but have taken the internal route to partnership. The findings are based on a sample of 200 partner profiles.

The summer survey of 209 private practice lawyers found that one in seven feel their pursuit of partnership is being hindered by the reduced number of partners retiring from the firm.

However, firms are also faced with the difficult issue of whether they can force partners to retire at a specific age. The Supreme Court ruled in Seldon v Clarkson Wright & Jakes that compulsory retirement may be justified as a means of workforce planning and succession planning, but rejected the assumption that 65 is a justifiable retirement age in itself.

“For partnerships, the case provides reassurance that their pyramid structures can justify a set retirement age to ensure staff can progress up the ranks. However, it’s unclear whether lower retirement ages, say 60 or 65, which may exist in some firms, would also be acceptable,” said Ed Stacey, head of employment and pensions at PwC Legal.

Michelle Chance an employment partner at Kingsley Napley, suggests that firms can change their partnership or LLP agreement to ensure partners retire at a time that suits the firm.

“My practical advice to professional partnerships, to minimise the risk of successful direct age discrimination claims being brought against them, would be to remove any mandatory retirement age from their partnership or LLP members’ agreement and instead strengthen the power of the firm’s management committee to remove a partner at any time for any reason,” she said.

“Such a decision should not have to be put to a majority vote of the partnership and the management committee should be empowered to agree such retirement terms with the partner in question as they deem to be in the best interests of the firm, taking account of the partner’s individual circumstances.”

James Thorne a consultant at top-100 firm Farrer & Co, believes that another way to manage the problem of long-term succession planning is to offer sweeteners to entice senior partners to retire early.

“This would be a voluntary carrot rather a compulsory stick and the outgoing partner would be offered a part-time consultancy for a set number of years with an income which is related both to what he would have received if he had stayed and to what the firm earns during the consultancy period,” he said.

“This helps the partner with his career planning and need for income and helps the firm by avoiding stage-managed performance reviews and the ill-will they can create, and at the same time creating room in the partnership for more junior members of the firm.”

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