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Does top UK firms’ strategy of shipping out associates for NQs hold water?
Clifford Chance, Linklaters and now Herbert Smith have all announced staff cuts due to the economic pinch. So far, so 2008. But a new characteristic - at Clifford Chance and Herbert Smith, anyway - is that cuts are being made to make way for new trainees and newly qualified lawyers.
When Clifford Chance said in March that it would axe 13 City associates, London managing partner David Bickerton said: “Our business is very strong. However, our attrition has fallen significantly and we have a programme of trainees and new qualifiers coming through.”
When Herbert Smith cut up to 51 jobs in London, managing partner David Willis said something similar: that taking account of trainees qualifying later this year, there would be no reduction in associates.
Aside from the morale problems that will surely result from ditching associates to make way for younger and cheaper worker bees, you could question whether this strategy is a knee-jerk reaction to the problems firms suffered after they cut trainee intakes in previous years.
“Given the difficulty of recruiting corporate associates of two- to five-years’ PQE in periods of heavy corporate activity, this is a dubious strategy,” says Mark Brandon, a former recruiter and managing director of legal consultancy Motive. “These firms need to cut capacity, but they underestimate how easy it will be to fill out when the market improves. That’s the problem with wanting 100 per cent utilisation - as soon as you get a spike in activity it throws things into crisis.”