Rapid market consolidation, poor financial performances and the entrance of new players to the sector has had a negative impact on the number of partnership positions available, research by accountancy firm Wilkins Kennedy shows.
According to the research, which is based on SRA statistics, the number of partners dropped by 153 in 2011-12, for the year ending 20 June. It is the first time the number has fallen since 2008-09 in the immediate aftermath of the financial crash.
By comparison, more than 2,100 new partner roles were created in the previous two years.
Wilkins Kennedy partner Tommy White commented: “Slow growth in fees means fewer promotions are taking place. At the same time some partners at smaller law firms have been forced to delay their retirement because of the recession.
“Some partners approaching retirement age have looked at their savings and decided that a comfortable retirement simply isn’t possible yet – especially with such low annuity rates.”
“They might also own commercial property and private equity investments - whose value will have been hit by the financial crisis. When existing partners delay retirement, it means that senior associates are forced to wait longer for their opportunity to join the partnership.”
The figures show that the number of partnership positions dropped significantly in 2008-09, with 676 few positions created. A year later when the profession rebounded, 1,466 partnership positions were created.