City Column Mid-market insolvency lawyers get busy 9
Profile
The newly knighted Sir
In-house Interview Anheuser-Busch InBev’s Claude Bahoshy 13
Nigel Knowles on how
his feet are staying firmly
Special Reports Insolvency/Romania 17/20
on the ground 12
THE LAWYER
VOL 23 ISSUE 2 WWW.THELAWYER.COM 12 JANUARY 2009 £2.95
Trainee retention rates defy economic crisis 20 per cent
By Husnara Begum
TRAINEES due to qualify
in spring 2009 have been
largely shielded from the
recession, with retention
rates holding steady at
above 80 per cent.
Leading the charge are
Slaughter and May and
Norton Rose, which are
By Kian Ganz
CLIFFORD Chance partners
are bracing themselves
for a 30 per cent drop in
profitability this financial
year, with plateau partners
expected to pocket around
£900,000 each. Last year
the top of lockstep payment
was £1.32m.
The last time plateau partners
earned less than £1m
was in the 2005-06 financial
year, when the equity
spread ran from £370,000
to £920,000 and average
profit per equity partner
(PEP) stood at £810,000.
As the majority of the
firm’s equity partners are at
or near the top of the nineyear
lockstep, average PEP
for the current year is likely
to be in the region of
£800,000.
Global managing partner
keeping hold of 96 and 90
per cent of their spring
qualifiers respectively.
Norton Rose is followed
closely by CMS Cameron
McKenna, which boasts a
retention rate of 89 per cent
after offering jobs to 26 out
of 29 trainees.
Camerons graduate
recruitment partner Simon
David Childs refused to be
drawn on exact figures, but
said: “We give partners
guidance from time to time
and have said to them they
should assume that PEP
would be significantly down
on last year.”
Partners also recently contributed
£60m between
them to the firm’s capital (The
Lawyer.com, 9 January).
Childs explained that the
firm had to make the
cash call, which equates
to an average of
£150,000 per
equity partner,
because turnover
had risen so
much in the
past few years
that the
firm’s capital
level looked
inadequate.
Partners
THIS WEEK #
Pilcher said: “CMS worked
hard to find positions for as
many qualifiers as possible.”
Freshfields Bruckhaus
Deringer, the only magic
circle firm so far to disclose
retention rates, is holding
on to 42 of its 49 qualifying
trainees. This is down
slightly from September
2008, when the retention
CC warns partners: profits
will plummet by a third
Slump will see plateau partners’ payout fall below £1m for the first time in two years
gave management the
power to increase capital
in tranches, but the
plan was changed
in October 2008
as the financial
crisis took
hold.
Childs said:
“At that point
we did a
U-turn. We
said if the banks
were willing
# #
CC redundancies spark
online debate
Readers blame bad
management for job cuts 3
Childs: PEP will be
‘significantly down’
rate was 91 per cent.
Ashurst and Herbert
Smith also reported 86 per
cent retention rates, while
Baker & McKenzie is
keeping 80 per cent of its
newly qualified lawyers.
At 62.5 per cent, SJ
Berwin has the lowest
retention rate so far.
Simmons & Simmons
to give us the money now,
then why not take the capital
in one tranche?
If it hadn’t been
for the chaos in
the markets
in October,
then we
wouldn’t have
done it in
one go.”
The move
will have
Burges Salmon saves
£12m in rent
Firm negotiates massive
saving on new Bristol offices 5
was not for behind, with a
retention rate of 66 per cent.
Mananging partner Mark
Dawkins said: “Most
practice areas only have a
certain number of positions
available for trainees to
qualify into. We weren’t able
to offer [everyone] places
which suited both them and
the firm.”
bers’ capital from £127m at
the end of the 2007-08
financial year to around
£190m.
Despite this, the firm has
not escaped the effects of
market conditions and is
now planning to cut jobs in
a number of jurisdictions.
The London office will
bear the brunt of the cuts,
with up to 80 of its 880 non- to the economic crisis, see page 4
partner fee-earners facing
increased mem- redundancy (TheLawyer. COMING SOON…
com, 8 January). Trainees In response to demand for a
will not be affected.
dedicated litigation news
The London cuts come service, The Lawyer is
after the firm reduced head- launching a weekly blog and
counts in Moscow and New email on contentious work.
York through limited redun- It will bring unrivalled coverage
dancy programmes and of the biggest cases as they
performance appraisals.
happen straight to your
Clifford Chance’s German desktop, with in-depth analysis
offices are also understood from the country’s leading
to be making headcount litigators.
reductions through
See TheLawyer.com this week
performance reviews.
Blackstone silk named as
First Treasury Counsel
James Eadie QC first silk to
win Government role 7
of associates
would refuse
retraining
By Steve Hoare
TWENTY per cent of
associates would rather take
redundancy than retrain to
another practice area,
according to the latest
YouGovCentaur survey.
The survey of almost
2,000 lawyers’ attitudes to
the economic climate reveals
a profession living in fear –
although some are more
nonchalant than others.
Legal recruitment consultancy
First Counsel senior
consultant Mark Brandon
said: “People are still
labouring under the delusion
that they could walk
into another job, and it’s just
not the case. Associate
recruitment is so flat.”
For most lawyers, retraining
or relocation are
attractive alternatives to
redundancy, but a sizeable
minority would reject both
options, with around
a quarter of associates
prefering to be out of a job.
#For more on associates’ reactions
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