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THEY WANT TO KEEP YOU

With associate retention at the top of the agenda, Gemma Westacott asks whether flexible working and partnership alternatives are really cutting the mustard.

In 2006-07 the top 100 UK law firms made a total of 1,210 partnership appointments. Of those 611 were internal promotions and 599 were lateral hires. This is reflective of the previous financial year, when a total of 1,200 partnership appointments were made – 589 internal and 611 external respectively. It is now indisputable that most firms have firmly embraced external recruitment as a growth strategy. For example, Taylor Wessing has grown its partnership by around 20 per cent through 55 lateral hires in the past three years, while Berwin Leighton Paisner’s partner count has grown more than 20 per cent following 41 laterals in the same period. But perhaps more significant has been the rise in the number of internal promotions with the importance of associate retention rising up the legal sector’s agenda.

Since 2004-05 the number of internal promotions within the UK 100 has leapt by 22.5 per cent – a further 112 lawyers made partnership in 2006-07 alone. At the same time, a swathe of firms has introduced alternative career paths, diversity programmes and employee incentives, such as flexible working, in a bid to keep hold of their associates. They want to keep you, the talent, and firms are offering increasingly attractive ‘carrots’.

Incentives

The Lawyer’s recent survey, conducted in conjunction with polling company YouGov, has confirmed that the majority of the legal market considers associate retention to be the biggest issue facing the sector today. But while the use of internal partnership promotions as a retention tool is on the up, two-thirds of associates at the UK’s top 10 firms are not actually targeting partnership.

Allen & Overy (A&O) HR director Genevieve Tennant says: “It may still be the case that partnership is either perceived as being too difficult to achieve or that the demands of the role, in terms of the impact on work-life quality, make it less attractive as a long-term career goal.”

Berwin Leighton Paisner (BLP) director of personnel Geoff Griffin agrees. “Whether for lifestyle reasons or the ever-increasing expectations and demands of the role, for many partnership is no longer seen as the attractive proposition it once was,” he says.

In a defensive move, most firms are introducing alternatives to partnership. A third of the UK 100 firms have installed, or are in the process of developing, some form of associate career path. At least 16 of these have been introduced in the past year, or are in the process of being created. Director and of counsel roles are by far the most popular choices.

Such initiatives have existed for several years – Addleshaw Goddard has had its legal director role in place since 2002, for example, although only 35 lawyers have sought to take up the option – but the catalyst for the recent take-up was arguably The Lawyer’s revelation in October 2005 that A&O was suffering from 25 per cent assistant attrition, swiftly prompting the firm to overhaul its partnership track. But a quick scan of the market showed that A&O was not alone – a survey one month later revealed that Ashurst was suffering a 26 per cent attrition rate and SJ Berwin was losing 25 per cent of assistants.

A&O introduced senior associate and counsel roles in November 2006, while Ashurst is to introduce an of counsel role from May 2007 targeted at those lawyers that managing partner Simon Bromwich describes as working in jurisdictions or practice areas that do not have the business case for partnership or lawyers who are not business generators. Others to jump on the of counsel bandwagon have been Freshfields Bruckhaus Deringer and Simmons & Simmons, while Nabarro is in the process of drafting up an alternative career path and Bond Pearce is conducting a wholesale review of its career structure.

But is this really the best retention strategy? Probably not, given that 82 percent of two to five years’ PQE associates told The Lawyer/YouGov that they believe the best way to retain them is by offering flexible working schemes, while 66 per cent just want more cold, hard cash. Linklaters went warm and cuddly in 2006, introducing a ‘timebank’, in which associates can accrue time in lieu to use as additional annual leave or a mini-sabbatical. Addleshaws improved its flexible working strategy in 2006 in a bid to improve retention, of female lawyers in particular, while Beachcroft is piloting remote working and Pannone has extended its already diverse range of benefits to offer staff the option of buying two extra days’ holiday.

In total, almost half of the UK 100 firms have some form of flexible working policy, although many of these were introduced in 2003 following the legislative changes introduced that year. Very few lawyers have since taken up the option. Eversheds is the only firm to report a three-figure take-up, with 126 fee-earners working flexibly, followed by Cobbetts with 97 and DLA Piper’s Europe, the Middle East and Africa (Emea) practice with 71.

Money, the traditional route to an associate’s heart, has remained a focus, with A&O again sparking controversy in October 2006 by announcing a 15 per cent hike in salaries for London-based associates and trainees. Many firms are expected to follow suit early in the new financial year. Slaughter and May has already jumped on the bandwagon, raising salaries and introducing a firmwide discretionary bonus of 15 per cent in November 2006. Field Fisher Waterhouse (FFW), meanwhile, is considering implementing its first-ever associate bonus scheme. However, the introduction of such a bonus backfired for SJ Berwin, with the silver circle firm suffering a very public dressing down from its associates following the introduction of a largely utilisation based bonus structure in late 2006.

Gemma Westacott , features editor