There may be signs of confidence in an economic recovery circulating the global legal markets, but if US firms’ promotions are anything to go by, the downturn is by no means over yet.
Of the 10 firms that have announced annual partner promotions, the majority are significantly down on last year.
In 2008 US firms’ response to the downturn was varied. Dewey & LeBoeuf and Latham & Watkins added to their partnerships by 20 and 30 respectively compared with 18 and 26 the year before. In contrast some of their rivals halved promotions last year, including Simpson Thacher & Bartlett, whose numbers slid from 10 to five.
This year there is much more of a consensus between US firms. Promotions have been scaled back across the board. Indeed, among this group of 10, only Milbank Tweed Hadley & McCloy saw any growth, adding just five partners in 2009 compared with four in 2008.
Weil Gotshal & Manges has been the most cautious of the group. The firm promoted just three associates to partner, less than half last year’s total of seven. These reduced numbers look like a trend for Weil. In 2008 promotions dropped by two thirds from 21 in 2007. Indeed, Weil saw the biggest decrease last year of all the US firms.
“It’s always been a conservative firm,” says one Weil insider. “We have to be realistic about the economy. How can you justify adding hordes of lawyers to the partnership when dealflow has diminished so significantly?”
Weil is by no means alone.
Latham & Watkins has scaled back partner promotions from 30 in 2008 down to 23 this year while Kirkland & Ellis has dropped from 67 down to 51. Cleary Gottlieb Steen & Hamilton halved total promotions from eight in 2008 to four this year.
US firms’ London offices have also suffered this year. Latham added six to its City-based partnership last year – two thirds more than this year with just two being promoted. The dearth of promotions in London is seen across the US firms that have made promotions so far.
For some, this is not a new trend. Gibson Dunn & Crutcher neglected London both this year and in 2008.
“Effectively London is an outpost for these firms,” argues one London US firm partner. “I think we often forget that in the UK. We’re not the be-all and end-all.”
Another partner adds: “Numbers globally have been cut but that will start to grow over the next few years. But I suspect London numbers will be down for a while yet. The focus is firmly on the domestic front.”
Indeed, from its international network, only Kirkland’s London and Munich bases received promotions this year – the rest were added across its US network.
Yet while Kirkland is focused on the domestic front, some of its peers proved they still see value in developing their international offices. Latham’s total promotions were down but more than half of the 23 made up were outside of the US with 13 new partners added to offices across Europe, Asia and the Middle East.
It is early days yet - the majority of US firms are yet to announce their 2009 promotions. But so far, conservatism has been a theme across the board.
As one London-based legal recruiter puts it: “A US firm would be crackers to add a high number of lawyers to the partnership.”