US firms in London are ramping up their trainee schemes as the lateral recruitment market in the City begins to run dry.
Shearman & Sterling has boosted its trainee intake by 80 per cent, from 10 in 2006 to 18 in 2007, while rival US firm Cleary Gottlieb Steen & Hamilton plans to increase its annual intake of trainees in London by two-thirds during the next three years.
Shearman London managing partner Kenneth MacRitchie has pledged to shun star lateral hires in favour of an organic growth strategy fuelled by internal promotions.
MacRitchie said: “US firms in London need to build up via lateral hires. But it’s not a sustainable model going forward.
“The point is we’re now approaching the next stage of the office’s development. We’ve matured to enable us to strengthen internally.”
Cleary, which has 12 trainees this year, will take on 14 next year, 18 in 2009 and 20 in 2010.
Cleary corporate partner Tihir Sarkar said: “We feel that by focusing on trainees we can develop a loyal team in London that’s grown up through the ranks.”
Shearman launched its formal trainee scheme in 2002, considerably later than firms such as Sidley Austin, which first started recruiting trainees in the late 1990s, but much earlier than others such as Latham & Watkins and Kirkland & Ellis, which launched formal schemes during the last two years.
Morrison & Foerster and O’Melveny & Myers welcomed their first newly qualified associate this autumn.
Shearman’s move follows some retention issues in London. In the past two years nine former Shearman counsel have left to make partner elsewhere.
Shearman built up its London office via a number of star lateral hires in the late 1990s and early 2000s, but is now looking to build organically as it has found it increasingly difficult to recruit the most talented UK lawyers.
To read The Lawyer’s commentary on this topic, click here.
Young recruits should stay in the UK
I couldn’t care less if US law firms are coming over here. London has some of the best lawyers in the world and will be able to compete. What I do care about is if there are law firms coming over and hoovering up our young recruits. That’s just unfair on them. They will be learning from a US firm used to US ways, that can be very different to the way we conduct ourselves in London.
Career prospects
Lateral hires send the wrong signals to existing staff but will they fill the void with trainees? I’m not so sure.
Young recruits should stay in the UK (and work at US law fims)!
In response to the Magic circle partner below, I am an associate in the London office of a US law firm. We have very few US lawyers over here and the people that I am learning from are all UK lawyers who came to this firm from magic circle/top law firm backgrounds in the UK. The only difference between learning from them and learning at a magic circle firm as far as I can see is that (a) they are a lot more involved in bringing on their younger associates and training them; and (b) they pay us a lot more than any magic circle firm would. The result is a much lower attrition rate.
US firms’ London trainees
This strategy will be difficult for US firms in London. Will US headquarters really be willing to take on the cost of increasing trainees in London? The US doesn’t have the model and so you could find these headquarters quite unsusceptable to this kind of strategy.
US firms London trainees
All I can say as a South African lawyer, is that you must be grateful that you are not doing your articles in South Africa. The average pay ranges from ZAR 3000 per month to ZAR 15 000 per month (i.e. £250 – £1000 per month). Most first year solicitors here earn more than the partners at some of the largest firms in South Africa. The United Kingdom is recruiting some of our best young talent. For example, about 15 out of 70 graduates from my year at a prominent South African university work in London.