What does the future look like for partner recruitment?

When I first started recruiting 14 years ago partners rarely moved, now there are more partners moving than associates. We are inundated with roles and every law firm is hiring partners. Where are we now and what are the current challenges for law firms?

• Too many law firms in London with internal pressure to continually increase charge out rates. This is challenging as at the same time clients have become increasingly price sensitive and are trying to push down rates and keep more work in-house. Partners are questioning whether their current firm is priced correctly for their client base and sector.
• Lack of identity and focus. Rewind the clock 10 years and law firms were more clearly divided into sectors and specialisms (particularly in the mid-City market) and now many firms have become bigger and bigger and full service whilst losing their uniqueness and the reason “why” people work there and “why” clients want to instruct them. Partners are questioning whether their practice and sector is key to the firm or becoming peripheral.
• Change of culture from partnership to corporate. This encompasses a range of factors including moving away from a previously commonplace lockstep structure to much more merit based/focus on individual billings eat which dilutes a more collegiate way of working through to firms run by central management with little or limited input and knowledge from the partners. This means loyalty to a firm and brand becomes less pronounced and partners are questioning whether they are in the right culture and whether it is truly a partnership.
• Focus on short term profitability. Firms focus on continual short term profitability which leads to many partners feeling what they do is never enough. In a very competitive legal market, firms need to maintain high profitability to keep their best rainmakers.
• Political uncertainty and global economic change. With Brexit and world economic uncertainty we see more caution and due diligence on hiring but certainly not a slowdown. Certain sectors such as energy have seen a slowdown whilst witnessing a rise in sectors such as technology and real estate development. Partners are considering debt levels and whether they are in the most stable firm in a time of uncertainty.

Looking forward what does the future hold?

• Too many law firms means more mergers and consolidation. Most of the time mergers are not a meeting of equals but one firm taking over another and then questions of integration, client conflicts and future strategy arise. This will lead to more partner movement, as after a lock in period, partners often re-evaluate how the merger is working and impacting their life and clients.
• Ever increasing charge out rates. The growth of smaller boutiques or smaller firms and virtual law firms means there are more alternative opportunities for partners who can join different types of firms focused in their specific sector with more flexible charge out rates and with a different way of often autonomous and flexible working. Whereas previously these platforms were eschewed, they are becoming increasingly popular.
• Culture. With the rise of the merit based partnership structure, the divergence with other structures becomes clearer and the choice between types of culture of different firms more pronounced. Collegiality, the prevalence (or not) of cross-selling and the investment into the firm all become issues to differentiate between different firms.
• Political uncertainty. Law firms have proven very creative at adapting to new legislation and political climates to sell new legal services. This again will lead to more partner recruitment and new legal skills. Lawyers are constantly reinventing themselves in a changing world and the creation of innovative and newer legal offerings are on the horizon.

Jonathan Benjamin is a Director of RedLaw and is focused on partner recruitment, having made many of the recent headline partner moves within the London market.

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