Promo nation: national firms' investment priorities revealed
14 July 2014 | By Hannah Gannagé-Stewart
14 July 2014
30 January 2014
24 March 2014
28 November 2013
22 October 2013
UK firms have focused this year’s partner promotions on home, but which cities and practice areas dominate investment?
The pattern of partner promotions at national firms over the past three years signals a cooling of the love affair with overseas growth, as they turn their attention to home.
The overall geographic split for appointments between 2012 and 2014 was 66.6 per cent UK and 33.4 per cent overseas. In the first two years that 2:1 ratio was pretty much replicated, but this year it has tipped more dramatically in favour of the UK, with 76 per cent of the partners made up being UK-based and only 24 per cent based overseas.
DLA Piper and Eversheds account for a significant level of the overseas promotions activity. DLA Piper was responsible for all promotions in the US and Australia over the past three years at national firms, which accounts for just
under half (43.3 per cent) of all overseas promotions. Its US promotions over the past three years may account in part for the overriding trend – the firm made up half as many partners in the US this year as it did last year, mirroring a more general move away from non-UK promotions.
Take DLA Piper’s US promotions out of the equation and the data reveals a steady decrease in overseas promotions over the past three years at national firms. This year’s figure is down 25 per cent on last year’s and 34 per cent on 2012.
It isn’t just DLA Piper that appears to have returned its focus to home turf. There were seven promotions in Australia in 2013, compared to just two in each of the other years. Without exception, all of the Australian promotions were made at DLA Piper.
In 2013 the firm made significant changes to its management structure in Australia, appointing UK head Andrew Darwin as country head in Australia in March 2013 and going on to name a series of new practice heads in the region.
The firm’s Australian partnership has been rapidly shrinking. There were 135 partners in Australia when DLA Piper and its Australian alliance DLA Piper Phillips Fox fully merged in May 2011 but that had reduced by 25 per cent to around 100 by the end of last year.
Eversheds has also gradually moved its focus away from overseas promotions over the past three years, making up 16 in 2012, 12 in 2013 and just seven overseas this year.
Irwin Mitchell has not made any overseas promotions over the past three years, concentrating instead on its key UK hubs, such as Sheffield, Manchester and London.
The firm pulled out of Spain at the end of 2013 after deciding that it was more cost effective to transfer the Spanish subsidiary to a local firm and work with it in alliance.
The US comes top of the overseas promotions table across the board (see Global table), but this represents a DLA Piper-focused skew.
There were 62 promotions in the US over the period, with a significant spike in the number made up in 2013.
If you remove DLA Piper’s US and Australia practices from the equation it is clear that national firms’ primary focus is on Germany and the eurozone. Germany consistently appears towards the top of the table for overseas promotions at national firms, coming in second overall, with 14 promotions between 2012 and 2014. The lowest Germany appears is joint-third with Poland in 2013.
In the past three years legacy Wragges made one European promotion, in France in 2013. Lawrence Graham matched this with one in Monaco in the same year.
Hong Kong came fourth in the overseas table with nine promotions between 2012 and 2014, closely
followed by Spain, which was just one behind, with eight over the
The Middle East was well represented in 2014, having a disproportionately high number of promotions despite the drop in overseas partners being made up overall.
The only other Middle East promotion over the period was by Eversheds in the United Arab Emirates (UAE) in 2012. There were none in the region in 2013.
Race to the regions
The focus of promotion activity for national firms this year was at home in the UK. The top three UK locations in 2014 for making up partners were London (43), Manchester (24) and Birmingham (18).
The same three came top in the period overall. The gender ratio was almost exactly two-thirds male dominated, with 64.8 per cent of the new UK hires being men.
Almost a third of all UK promotions were in London, with 102 in total between 2012 and 2014. However, there was a notable spike in regional promotions in 2013 when emphasis moved away from London and 74.5 per cent of the UK promotions were in the regions.
Second to London every year of the sample, and overall, was Manchester. There was little fluctuation in the North West hub, which saw stable numbers each year, with 21, 22 and 24 promotions in the three consecutive years. None of the other cities with high numbers of promotions can claim its consistency. Even London saw fluctuations of between 21 and 65 per cent year-on-year.
With London and Manchester dominating the UK promotions – they took just over half (51 per cent) of all the UK’s partner promotions between 2012 and 2014 – those into other regions were more volatile.
The natural order of the rest of the regions is undergoing some reorganisation, with Liverpool, for example, losing ground, while there was a late surge towards Bristol at the end of the three-year period.
Liverpool seems to have had the hardest time attracting consistent levels of promotions. Although the city is fifth in the UK overall during the period, it only actually makes it into the top five once when you break the promotions down by year.
In 2013 Liverpool is the fourth most favoured city in the UK with 10 promotions, placing it just ahead of Leeds, which saw seven.
However, in 2012 Liverpool was pipped to a top five spot by Sheffield, which had five promotions where Liverpool had just four. This year Liverpool fell even further down the table – to seventh position behind Southampton, which had five promotions compared with Liverpool’s three.
This year is notable also for being the first year in which Bristol makes it into the top five most promoted into cities in the UK. With nine promotions this year Bristol takes fifth position, just behind Leeds.
This is in no small part down to rapidly growing Bristol-based TLT, which made up five partners in the city this year, the same number as it made up in the two previous years combined.
DAC Beachcroft also saw a bumper crop of Bristol promotions this year. The firm made up four in the city, just one short of the number it made up in London.
In 2012 Bristol sat in joint-seventh position with Cambridge, with two promotions, and it climbed one place to seventh with four promotions the following year. Averaged out over the period, it is in seventh place overall.
Between 2012 and 2014, national firms made just one promotion each in Chelmsford, Thames Valley and Basingstoke.
Cardiff and Northampton saw two each; Glasgow, Newcastle, Newport, Reading, Aberdeen and Dublin saw three; Nottingham, Edinburgh and Cambridge saw four; with Belfast at five and Southampton seven.
The Scottish offices are notably under-represented in the sample. Edinburgh just makes it into the top 10 overall with four promotions over the period, placing it in equal ninth position with Cambridge and Nottinghamshire.
Aberdeen and Glasgow come in joint-10th with three promotions each, alongside Dublin, Reading, Newport and Newcastle.
That said, all three Scottish cities were promoted into in 2012 and 2013 – it was only this year that Aberdeen saw no promotions at all.
Almost all the Scottish promotions made were from Pinsent Masons, plus two from DLA Piper. Having made six Scottish promotions last year, Pinsents made just two this year.
When you look at the average number of promotions made at national firms as a proportion of their partnership, it is clear that all-equity structures are not your best bet if you want to be made up (see Average promotions as percentage of partnership).
The average percentage of BLM’s partnership made up over the past three years is 11.8 per cent, or 50 in total since 2012.
DWF made the second-highest number of promotions relative to the size of its partnership, although this firm represents a slight anomaly in the data as it does not promote until November each year, so is yet to announce its 2014 promotions. The average was therefore based only on figures from 2012 and 2013 and came out as 7.8 per cent, or 34 in total.
Eversheds is third in this table, with an average of 7.2 per cent – that is, 71 partners made up overall between 2012 and 2014.
The likelihood of promotion after Eversheds’ position in the table is relatively similar at each firm until you get down to Hill Dickinson, which made up an average 2.7 per cent of its total partnership numbers between 2012 and 2014 – a total of 13 lawyers in three years.
RPC is doing fractionally better, with an average 2.8 per cent, or six lawyers in total. This may be down to its all-equity partnership, which arguably leaves less opportunity for promotion than at firms with salaried partners at entry level.
Coming in third from the bottom of the table is Kennedys. The firm made up an average 3.2 per cent over the three-year period, equivalent to 15 partners in total.
Looking at the figures purely as total numbers promoted, there is some change in the order. DLA Piper, for example, shoots straight to the top with 137 partners made up globally in the past three years.
But when you look at DLA Piper’s promotions figures as a proportion of the whole partnership, it appears fourth from bottom, with just 3.6 per cent made up as a proportion of the whole partnership.
Eversheds and BLM still do well on total numbers. Eversheds just jumps ahead of BLM, with 71 made up compared with the latter’s 50.
Hill Dickinson still sits towards the bottom of the table, although it has switched places with RPC to appear second from the bottom. TLT comes in joint-second from the bottom, also with 13 partners made up over the period.
That means that Kennedys is third from the bottom both in total promotions count and the relative count, with 15 made up between 2012 and 2014.
The greatest number of promotions over the period was in litigation, with 79 lawyers made up (see Practice Areas infograph, right); 53 men and 26 women. Litigation and personal injury both saw 26 female promotions, making these the areas with the highest number of female partners over the period. The number of promotions into litigation departments increased year-on-year, with 20 being made up in 2012, 26 in 2013 and 33 this year.
The second highest number of promotions over the period was in corporate, with 56 in total. Whereas in litigation departments almost a third of those made up were women, in corporate they accounted for just 18 per cent.
This year saw the highest number of promotions into corporate practices over the tracked period, at 23. There were just 19 made up in 2012, and a further drop to just 14 in 2013 – perhaps, reflecting firms’ sense of caution over the rate at which
transactional activity was likely to return to the market at that time.
Despite upheaval in the personal injury market, it is the third most highly represented discipline among those promoted at national firms between 2012 and 2013. It did, however, seem to experience some lag as licensing of alternative business structures (ABS) began in 2012 and the Jackson reforms were hovering on the horizon.
In 2012 just 10 lawyers were made up in personal injury but as the impact of reforms became less of an unknown quantity this number rose – to 19 the following year and again to 22 this year.
Despite the fact that across the board its total number of promotions increased each year, real estate saw a drop-off in 2013. There were 19 promotions in 2012, it then dipped to just 12 in 2013 and returned to 19 this year.
There were seven promotions of non-lawyers to partner between 2012 and 2014. Three of these were women and most were at Irwin Mitchell, the only ABS in the
In 2013, having been granted four ABS licences the previous year, Irwin Mitchell promoted its first tranche of non-lawyers, making up four to partnership.
The national firms’ promotions remain centred around core disciplines of dispute resolution, corporate, personal injury, real estate, employment and banking, with related niche areas such as insurance, IP and tax also being bulked up.
However, at the bottom of the table are areas such as private client, court of protection and healthcare. Even costs and professional negligence see only two or three promotions over the period.
As the market places increasing demands on these firms to differentiate the insight from this promotions data provides a useful snapshot of investment opportunities.
ABS: partnership for all
The non-lawyer promotions at Irwin Mitchell included head of communication Mark Duffell, head of recruitment Janet Sandford, head of operations for the firm’s motor personal injury and recoveries work David Robinson and general manager for the private client legal services business Danny Varhalamas.
A further non-lawyer partner was made up this year in the form of head of business development Rosemary Thorpe.
But it was not Irwin Mitchell that made the first non-lawyer partner promotions. That was Eversheds in 2012 when two non-lawyers from the firm’s South African alliance at the time, Routledge Modise, were made up.
The Lawyer interrogated three years’ worth of partner promotions data for 14 national firms.
The primary league table shows the promotions as a proportion of the firm’s total partnership.
The calculation was done for each year between 2012 and 2014, the average of those figures was then used to rank the firms.
To compare like-for-like as much as possible The Lawyer’s data has been separated into 28 practice types (see infograph, right). The list is not exhaustive but it aims to remove some of the inconsistencies between firms’ categorisations of practice areas and sectors.
Applying the categories is not a precise science but every effort has been made to do so fairly.
Though there may be a few anomalies, the analysis provides an insight into which areas have come to dominate partner headcount in the past three years.