Promotions rebound post-crunch
25 April 2011 | By Katy Dowell
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Partnership promotions across the country’s leading firms have topped 2009’s and 2010’s levels, marking a return to upward mobility within the profession.
Of The Lawyer’s top 30 firms, 19 have announced partnership promotions for the next financial year. Looking at the promotions in total, there has been a 32 per cent jump in the number of those made up from a low of 206 in 2010 to 272 in the latest round. That tops 2009’s level, when 236 associates from the representative firms took partnership.
According to Macfarlanes managing partner Julian Howard, the uptick in promotions is indicative of the fact that firms are beginning to feel more confident about future financial stability.
Howard says: “I’d guess that 12 months ago was probably quite a low point for many firms. It’s only a comparison with a very cautious time, when many firms were still thinking of cutting partners in one way or another.”
Across the profession more than 3,500 jobs were made redundant over the three years beginning in autumn 2007, with real estate practitioners hit the hardest as the construction sector went into meltdown.
Promotions across real estate partnerships remain low, with just 15 made up this year within the 19 representative firms.
Compare that with litigation and arbitration practices, which have seen an upswing in activity, with 45 promotions in 2011.
Firms are also beginning to invest in the future of their corporate and commercial practices, with 91 made up in corporate and 45 new finance partners.
Eversheds’ latest promotions round is reflective of the wider trends, with a strong focus on both its litigation and corporate commercial practices, where eight and 10 were made up respectively. The firm is set to promote 22 associates in the latest round, up from 19 a year earlier, but still lower than 2009’s high of 32.
Eversheds chief executive Bryan Hughes comments: “Our litigation team’s had a good couple of years and we have a lot of good people in the department. They need to see that they can move forward within the firm, otherwise they might
be tempted to leave.
“CoCo [company commercial] is our biggest department and litigation’s the second-largest, so you’d expect these departments to have the most new partners. But things have slowed down a bit in real estate so we have fewer new partners there.”
Hughes believes, though, that it will take some time for the profession to recover from the economic slump.
“We’ve had a couple of years of recession and the people making partner now have been in that process for longer than that period,” he says, “so I think it will take longer before we’ll see any clear trends.”
Eversheds is not the biggest promoter in the profession, with that accolade going to DLA Piper, which made up 53. Hogan Lovells, which has made up 36, came in second. It is the first round of promotions made by Hogan Lovells as a merged firm (see box).
These two firms had the highest number of female promotions, with DLA Piper appointing 11 women and Hogan Lovells 10. That said, when these figures are taken as a percentage of the firms’ total promotions, they do not perform so well. For DLA Piper, just 20 per cent of this year’s promotions are female, while at Hogan Lovells the proportion is 28 per cent.
This contrasts with Bird & Bird, where the promotions are 100 per cent female, albeit there were only two in total. Other firms that performed well in this respect are Norton Rose (47 per cent), Squire Sanders (44 per cent) and Nabarro (40 per cent).
At the other end of the scale Slaughter and May, which runs a tight partnership structure, has promoted just one female partner since 2009; as has Wragge & Co, which operates an all-equity partnership and which has decided to make no promotions at all for 2011.
This shows that, despite the slight improvement in female career prospects at many of the largest firms, the proportion of new partners who are women is still much lower than the estimated 60 per cent of females entering the profession.
Whether you are female or male, partnership prospects for UK-based lawyers are fading as firms continue to internationalise their businesses. Overall, firms are taking a higher proportion of non-UK lawyers into their partnerships.
The outlook is not completely bleak, however, with the number of UK lawyers promoted up from 64 to 113 in the past year. That represents a rise of 77 per cent in pure numerical terms.
Berwin Leighton Paisner, which promoted a total of 13 this year, has made up nine in the UK, while Eversheds promoted 12
UK lawyers out of a total of 22.
Of the three magic circle firms to have unveiled promotions, Freshfields Bruckhaus Deringer made up the largest proportion of UK-based lawyers, with nine out of 20 (45 per cent).
Allen & Overy, which promoted 21, and Linklaters, which made up 18, both promoted six lawyers to the UK partnership. That is the equivalent of 29 and 33 per cent respectively.
It is too early to call a renaissance in partnership promotions, and it is unlikely that firms will return to the bumper crops of the pre-2008 days any time soon. Yet there is a break in the clouds, and this presents an opportunity for firms to recognise the talent that has been moving up the ranks during the course of the global recession.