Some law firms think they can remedy this situation. I think, in the immortal words of Darryl Kerrigan in the best legal film ever, The Castle, "They're dreaming!" Allen & Overy, for example, reported churn or attrition rates of 26% last year among its associates. That's a lot of wasted expertise. To counter this A&O has now appointed an associate to its management team. It will show, apparently, that associates are important, even loved. A&O has also devised a range of senior associate positions and more to entice associates to stay. The idea is to get associates to stay, not to promote them to partner. Lawyers are clever people; do we honestly expect them to be taken in by these ruses? I imagine not.
A recent survey by YouGov for The Lawyer showed that only 37% of associates in the large law firms (ie. with a turnover of more than £250m) expect to make partner. What drives their ambition? More money. But their greatest fear in making partner? Insecurity and risk management. It's tough being an associate.
So, how can we summarize these indices of change? The tournament model almost belongs to another era. The changes Bill Henderson is analyzing are also occurring in the UK.
- One, associates don't even consider becoming partners or an ever-diminishing number do. This may be because they see it as too remote or because frankly it isn't worth the battle. Partners like associates are essentially fungible unless you possess some key rainmaking skills.
- Two, there are plenty of alternative careers for lawyers now, which no longer carry the stigma of failure. Banking is increasingly attractive, either as inhouse counsel or as a banker. Consider Harvey Miller's move from Weil Gotshal to Greenhill. Annual attrition rates are now approaching 30% for associates. It's probably too late for law firms to do anything to counter the trend. I don't think Allen & Overy's associate on the management board will suffice, nor will all the other arrangements that firms are thinking about.
- Finally, when the Clementi changes go through in the Legal Services Bill and law firms start to be owned by external investors, eg, Goldman Sachs, KKR, Blackstone, etc, partnership will die a lingering death as they chase the IPOs and become directors and employees.