News

Partners are ‘coasting to retirement’ and ‘chronically under-performing’, says new research

By on
20

US law firms living in ‘false sense of security’ — is the same true in the UK?

A new US survey reveals what we knew already but didn’t dare say: there are a lot of partners out there doing not a whole lot of lawyering.

The Altman Weil 2018 report, its tenth survey of the US law firm market, found that 40% of US law firms blame “chronic lawyer under-performance” on partners who are, it says, “coasting to retirement”.

It reports that “the absence of rigorous management of lawyer and client transitions is a huge ongoing problem in the legal profession as Baby Boomers extend their careers ever longer”.

The report also, depressingly, paints a portrait of a market where lawyers at all levels are doing work which could be done by someone more junior or less qualified, or worse, by a piece of technology: “The hard reality is that too many lawyers are doing work they are significantly overqualified to do, and clients do not want to pay for that.”

As a result of these problems, “overcapacity is diluting profitability in 58% of all law firms”.

The 2018 Firms Most List

The survey did find that “most [firms] have achieved a reasonable level of ‘comfort’ on the rising tide of general economic recovery”. But Altman Weil says that this hides many significant systemic problems: “We think this creates a false sense of security and a mis-direction of focus in many law firms.”

In the UK, there are also reasons to be concerned.

If we look at the top tier of law firms, over the course of 2017 many of the big players’ financial results showed revenue growth (Allen & Overy at 16%, Clifford Chance at 11%, for example). However, as PwC revealed at the end of last year in its annual law firm survey, there’s an uncomfortable truth about those figures. That is that foreign exchange movements — NOT improved productivity — contributed to around a staggering two thirds of overall fee income growth among the UK top ten law firms.

PwC says the real picture is “one where profitability is under threat, competition is ramping up, and the impact of digitisation is potentially overwhelming”.

If we look at the top 200 law firms in the UK, they have seen massive revenue growth since the recession (73% between 2007 and 2017). But there are two significant factors to bear in mind here.

First, the number of lawyers has also increased astronomically: 44,133 to 63,548, the number of partners from 6,000 to 19,736. There is a big question mark over whether those numbers are sustainable. Second, among all this growth there has also been consolidation (and among big names too): for example, the triple merger between CMS Cameron McKenna, Nabarro and Olswang to form CMS. This may demonstrate fault lines in the market.

Altman Weil’s survey acutely observes that “without a crisis, it’s hard to create a sense of urgency”. It seems law firms on both sides of the Atlantic are not in crisis, so lack that energy to change. But the survey also suggests that firms should not wait for the next crisis to deal with some of the hidden problems that they have. Junior lawyers might be pleased to hear the survey say: “Partners need to care about the firm, or, at the very least, get out of the way.” Ouch.

Sign up to the Legal Cheek Newsletter

20 Comments

Anonymous

Of course older partners are coasting, that’s the point of the entire greasy pole.

I dream of the day I can claim “Senior Statesman” status, monstering equity points and doing pure BD and relationship management.

(48)(0)

s.32 Salmon Act 1986

As do we all.

But to more pressing matters: WHY has legal cheek chosen such an awful cover photo for this story? Obviously no partner outside Irwin Mitchell would be caught dead wearing those shoes! Honest to goodness.

(54)(0)

Biglaw Survivor

30 years ago the profession changed. The path to partnership became a 10 year sprint, and most didn’t make it. Those who did are asked to keep sprinting another 30 years. That’s not a profession.

(0)(0)

Anonymous

Well, it was reasonably foreseeable.

(4)(0)

Anonymous

Say what you like about it but the advantage of lockstep is that it requires heavy pruning of the partnership and makes it very obvious who isn’t pulling their weight, given all the partners are dependent on one another for their drawings.

(6)(0)

Anonymous

Really interesting article. I absolutely love data heavy stories.

Does the report deal with partner’s bringing work into a firm being balanced against the work they actually do at the firm (or lack thereof)? It is well known that partners that change firms often take clients and that is where their value lies.

My biggest concern about being made up (never going to happen) is not the work-load or the responsibility but simply the pressure to bring clients through the door in the first place.

(13)(0)

Anonymous

I think a lot of people underestimate the stress and pressure of bringing business in, for sure

(11)(0)

Disgruntled employee

In my experience some partners do no work at all.

They literally sit on their arses all day long talking shit on the phone about personal matters and browse the internet for what car they are buying next. That’s when they can actually be bothered to stay in the office and not fuck off home by lunchtime.

Cunts.

(15)(3)

Anonymous

You OK, hon?

(18)(0)

Anonymous

Then wait until you are three years PQE and set up your own firm and take on the liabilities of paying employees since it is so easy.

(21)(0)

Anonymous

And try to bring in the work!

(0)(0)

Anonymous

Being a partner is actually like being an employee (but with more admin and more people who hate you because you have to take the unpleasant decisions on who to promote, do appraisals and performance reviews). In most cases, we are capable of being (and sometimes are) demoted or ejected from the partnership on the whim of a small cabal of sociopathic, divorcee, bread-headed morons who know the cost of everything and the value of nothing.

(22)(0)

Anonymous

You can find the definition of an employee under s.230 ERA 1996. If that doesn’t help, you can look at the 4 common law tests: mutuality of obligations, exertion of control, personaly service and economic reality/integration. And also, should you have time (which you clearly do), the case of Ready Mixed Concrete.

(4)(2)

Anonymous

Are you writing an undergraduate essay or something?

(30)(0)

Anonymous

It’s called the LPC…

(0)(0)

Anonymous

And your point is….

(1)(0)

Anonymous

Common misconception, isn’t it, that partnerships are collaborative and intra-nurturing haha. Dog eat dog, even when at the top.

(4)(0)

The EU

Don’t forget about GDPR.

(4)(2)

Anonymous

What about the GDPR?

(0)(0)

Partner

Try bringing in work. Leeches.

You’re overheads

(6)(1)

Comments are closed.

Related Stories