Snapshot of a downturn: newly-qualifieds’ pay reaches up to £66,000, partner profits of more than a million and record trainee retention. I know that the law lags behind the rest of business, but this is ridiculous.
It may be early in the cycle, but the indications from the broad spread of respondent firms are very promising, which is good news for worried trainees who are about to enter the marketplace as qualified lawyers. With the blessed confidence of youth, they may not realise they’re the lucky ones - certainly luckier than their colleagues two years ago, when trainee retention rates dipped markedly.
But given that most managing partners are predicting doom, how come they’re not letting more trainees go when they don’t have to shell out for redundancy packages?For a start, management jitters need examining. Lawyers - whether partners or assistants - have never earned so much in the history of the UK legal profession. What most managing partners consider to be disastrous is a 10 or 20 per cent drop in PEP next year, so what they regard as a ‘difficult’ market is therefore entirely relative.
There’s another reason for strong retention rates. Graduate recruitment is expensive and time-consuming. A whole bureaucracy within firms has grown up dedicated to recruiting the right trainees, so no wonder no one wants to take snap decisions rooted in the short term. And, considering the unprecedented debate on TheLawyer.com last week over Eversheds’ stance on diversity and recruitment, sourcing candidates from diverse backgrounds will compound that further. (At this rate, half of firms will consist of HR consultants.)
What’s more, law firms are also aware of the nasty PR they can get if they drop a bunch of trainees on qualification. That doesn’t mean a reprieve; three prominent managing partners have admitted to me that they will be using performance management tools to hone the headcount this year. Our advice to new associates? Throw yourself into your firm’s corporate social responsibility programme: they can’t get you that way. And it’s more fun than a data room.