High-flyers get wings clipped as UK bears the brunt of promotion caution
27 April 2009 | By Margaret Taylor
With the 2009 promotions season well under way, the theme so far is that generally fewer partners are being promoted.
BLP, which last year promoted five new partners, has this year made up seven, with one progressing from the post of associate director. The firm has remained committed to its traditional powerbase, with the real estate practice receiving the bulk of the promotions with five. As was the case last year, all the new partners are based in London.
At Clydes, the firm has bettered last year’s record round of nine new partners by making up 10, six of whom are based in London.
Camerons has taken a bolder step than either BLP or Clydes and has upped the number of promotions by more than 50 per cent. The firm made up 11 to its partnership last year, while this year it has promoted 17.
William Arthur, a consultant at Kerma Partners, says one reason that the majority of firms have reduced their promotions this year is that they want to protect their equity.
“Generally speaking, firms will be very careful about the equity because they’ve got to manage the numbers,” he says. “If they think that levels are down then clearly they’ll have to be very sure about the people that are coming in.”
As all of Camerons’ new partners have been promoted to the firm’s office-partner-salaried rung, which was introduced in March, their new status is unlikely to have a dramatic impact on the firm’s overall profitability. As the new position represents an extra stage in the route from senior associate to the three-year salaried partner level, it will be some time before the new partners make the equity.
Although the prospect of watering down already deflated profit figures will be a key factor when firms are making their promotions this year, BLP managing partner Neville Eisenberg claims that his firm was not negatively influenced by the recession when making its partnership decisions.
“Despite the difficult market conditions, we believe in providing our people with career opportunities that help them develop to their full potential,” he says.
That said, Tony Williams, principal at Jomati Consultants, points out that US firms in particular have taken a tougher stance on partnership this year.
“US firms tend to take a more robust approach to cutting numbers than UK firms,” he says. “US firms have raised the bar for partner candidates this year in terms of individual qualifications and the business case required.”
Notably, Mayer Brown, which admitted its new partners at the beginning of the calendar year, saw total promotions fall from 43 last year to 27 this year, while the London office saw a drop from 10 to two.
London offices generally have had mixed fortunes this year, with US firms tending to cut back the number of promotions in the City.
Morrison & Foerster (MoFo), Reed Smith and Simpson Thacher & Bartlett are the exceptions to this. MoFo promoted one in the City compared with none last year, while Reed Smith increased its London promotions from three to four and Simpson Thacher raised its promotions from one to two.
Among the UK firms, Linklaters is one of the few to favour London, with a third of its 18 new partners based in the City. Last year seven of the firm’s new partners were London-based.
Magic circle rival Freshfields Bruckhaus Deringer, on the other hand, has favoured its overseas offices in its reduced round. Last year 40 per cent of its new partners were based in London, but this year the proportion has droppped to 14 per cent.
That said, Arthur at Kerma Partners warns against interpreting the drop in London promotions as a slight to the City.
“I don’t think we can read too much into it,” he says. “We need to see the lack of promotions in relation to what happened last year as well, because there may be bits of imbalance that firms will seek to redress this year.”