Revealed: A&O takes biggest hit as magic circle squanders £10m on lost trainees

Allen & Overy (A&O) threw away more money invested on trainees than any other top 20 UK firm, according to research by The Lawyer that shows that trainee attrition last year cost magic circle outfits more than £10m between them.

Calculations based on 2012/13 cohorts show A&O wasted £2.8m of the £11.1m it spent on its trainee scheme including the LPC course fee, maintenance grants and first and second-year salaries. This is on the basis of 28 of its 111 trainees not being retained after spending £100,000 on each one.

Clifford Chance and Linklaters both suffered wastage of more than £2m each, while Slaughter and May at £1.2m lost the least out of the quintet after seeing only 12 of its 91 trainees leave.

An A&O spokesperson commented: “When you factor in revenue generated by the trainees during their contract we don’t make a loss on our trainee group. But more importantly this a crucial investment in the future of the business. While retention rates may rise and fall with the market, there will always be a need to attract and retain the most talented people and that’s an investment well worth making.”

Pinsent Masons lost £2.2m after 23 trainees – costing £8.6m in total – left the firm. Pinsents was the poorest performer outside the magic circle by this measure, followed by Herbert Smith Freehills, which spent £101,000 each on 88 trainees and lost £1.9m after 19 did not continue at the firm.

The figures do not include partner time, training, marketing and graduate recruitment costs, all of which are likely to involve significant economies of scale.

Bird & Bird was the most efficient of the top 20, losing just £92,600 after keeping on 11 of its 12 trainees, on whom it spend £92,600 each.

Meanwhile, data compiled by The Lawyer shows that retention rates across the top 20 have fallen by 5 percentage points in the last year, from 83 per cent to 78 per cent. In 2012, 361 of a total 432 trainees were kept on by the top 20 firms. That compares with 370 of a total 474 trainees in 2013.

Of the magic circle, only Clifford Chance bucked the downward trend. The firm revealed a 6 per cent boost in its retention tables, from 76 per cent last spring to 82 per cent this year. However, the firm also reduced its trainee intake target, which is being managed down from 120 to 100 from 2015.

For more detail on the efficiency of firms’ trainee schemes and the developing shape of the traineeship scene, see feature

Trainee spend and retention across the top 50 UK firms by revenue, 2012/13

Firm Spend per trainee (£) 2012/13 trainee count Total spend (£) Trainees leaving Total loss (£)
Allen & Overy 100,000 111 11,100,000 28 2,800,000
Clifford Chance 100,000 128 12,800,000 26 2,600,000
Linklaters 101,000 124 12,524,000 24 2,424,000
Pinsent Masons 95,300 90 8,577,000 23 2,191,900
Herbert Smith Freehills 101,000 88 8,888,000 19 1,919,000
Hogan Lovells 102,000 71 7,242,000 18 1,836,000
SJ Berwin 100,000 56 5,600,000 18 1,800,000
CMS Cameron McKenna 101,000 59 5,959,000 14 1,414,000
Ashurst 108,000 58 6,264,000 13 1,404,000
Freshfields Bruckhaus Deringer 103,000 92 9,476,000 12 1,236,000
Slaughter and May 100,000 91 9,100,000 12 1,200,000
Berwin Leighton Paisner 98,500 44 4,334,000 12 1,182,000
Eversheds 94,000 83 7,802,000 12 1,128,000
DLA Piper 98,000 86 8,428,000 11 1,078,000
Norton Rose 100,000 40 4,000,000 9 900,000
Irwin Mitchell 80,000 40 3,200,000 10 800,000
Taylor Wessing 98,000 44 4,312,000 6 588,000
Simmons & Simmons 100,000 49 4,900,000 4 400,000
Clyde & Co 94,000 36 3,384,000 2 188,000
Bird & Bird 92,600 12 1,111,200 1 92,600