Over here, there's all sorts of speculation about how firms are affected by the downturn, including one persistent rumour that one particular major firm's corporate department is working at 40 per cent utilisation. If that was replicated, the effect on bottom line would be immense. Law firm overheads – accounted for entirely by salaries and premises – are so fixed that any drop in gross billings has a disproportionate effect on the net profit; in other words, on partners' personal take-home pay.
The good news for many younger lawyers is that UK law firms are not, on the whole, looking to wield the axe. Firms may be operating tacit recruitment freezes, but the majority recognise that getting rid of the worker bees is unhelpful, to say the least. Not only would such a move destroy morale, but it would destabilise the finely calibrated leverage ratio of assistant to partner.
It is the underperforming equity partners who should worry. Virtually every firm has someone who is consistently subsidised by their colleagues.
This is where lockstep comes in handy in identifying the expensive mistakes – in firms where the profits are shared out on a merit basis, underperforming partners justify their place within the equity simply by taking a lower draw.
Meanwhile, spare a thought for the doomed generation. Every firm has a number of senior associates who are never going to make partner. Solid, but not stars, they are the ones who managed to hang on to their jobs as trainees during the last recession, only to find now that their chances of partnership have collapsed. As one managing partner says brutally: “It's better to tell them now and not have to pay for them over the next 12 months.”
Or maybe – just maybe – partners should accept that in a recession, you make less money.