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This year, The Lawyer’s annual ranking of the largest UK law firms by turnover is available as an interactive, digital benchmarking tool. For the first time this will allow you to manipulate each data set against the metrics of your choice.
The legal profession has witnessed a subtle but nevertheless significant change over the last five or six years in the relationship between the partner and the firm.
The cosy, club-like atmosphere has been discarded, and lawyers are under heavy pressure to perform to justify their existence. The bond of trust between partner and firm has been severed.
The shedding of partners by many firms in the early 1990s was a sign that partnership could no longer be considered a job for life. The recessionary pressures have now been replaced by intense competition and a recognition by many firms that, if they are to survive, they need to be run more like businesses.
For many in the large and medium-sized City firms, the pressure is a bit too much, and there is a growing trend for partners to retire in their early fifties.
Younger partners too, are realising that their careers as partners are more likely to span 20 years than 30. As such, they are under pressure to reach their full earning potential sooner.
There are moves among a number of firms that operate a lockstep system to shorten the time it takes to become a plateau partner, and to reduce the differential between the top and bottom of the equity.
Another significant change in partnerships has come about because they are bigger than they used to be. In the face of competition, many firms have centralised management, taking away much of the decision making from the partners in the process. To some partners, this has further eroded the bond between them and the firm.
For new partners, expectations about their role in running the firm differ from those of many of their forebears. They recognise there are relatively few decisions - albeit the important ones - that a partner has a say in.
In some firms, partners feel more like employees than proprietors of the business and, as such, are more willing to sell themselves to the highest bidder or to a firm offering a better chance to further their career.
Many of the changes in partnerships are a consequence of increased competition and the reactions of firms to it. There is a danger that the special partnership ethos will be lost, and this will make it even harder to respond well to competition.
Evidence from other professions suggests the most successful firms are the ones that have retained a strong partnership ethos, providing cohesion and consistently high levels of performance.
In the face of mounting competition, it is important not to throw the baby out with the bath water. While much may need to change, maintaining many of the core partnership values will be crucial for future success. Otherwise, law firms may go the same way as failed businesses of the early 1990s.