Preparation for Partnership – A Cautionary Tale

By RedLaw | 01 Jul, 2015

There is a commonality with all but a few senior associates in private practice firms throughout the UK which can often be something of a taboo subject. Whilst senior associates are often leading deals, supervising juniors and are developing strong client relationships through the servicing of institutionalised relationships or generating their own clients there is still a certain amount of ambiguity in relation to partnership. Whether the path is clear or uncertain, they share the same question; when?

Partnership is often viewed by many as the pinnacle of their career and single most important goal  since thumbing the pages of Donoghue -v- Stevenson (1932) on day one of university to securing that all important training contract and beyond. It is done with an ambition of one day getting the prize of partnership. However, few senior associates have clarity as to when they will reach that all important promotion.  The backdrop of a “good” market leads to each firm nurturing its talent pool at all levels. Whilst firms are keen to reward strong associates with opportunities for career advancement there is still a lack of transparency as to what is required by senior associates to actually achieve that partnership promotion.

In the previous two decades there has been a significant shift in the structure of private practice firms. Ratios of associates to partners have dramatically increased resulting in an unprecedented number of solicitors being admitted into practice. What was once seen as a rite of passage has now become a difficult road to navigate with few sign posts along the way. No longer is it a matter of waiting your turn; the truth that they never tell aspiring solicitors is that partnership is only available to the chosen few.  To put it simply, there is not enough room at the top! An interesting but ultimately unanswerable question is how many law students would choose to embark on studying for their legal qualifications if they really understood the extent of the challenge ahead?

A good market will result in increased expectations for associates but there is never wrong time for associates to be exploring the options that they have available for career advancement. In an ever changing reactive market, associates at all levels should be carrying out due diligence as early as possible so that they know what they need to achieve to be in the best possible position to realise their ambition.

Increasingly however there are a number of options available for ambitious associates aside from partnership. Other viable options include promotion to Legal Director or Of Counsel for those wishing to remain in private practice or the transition to an in-house position within industry and commerce or financial services organisations.

In recent years many firms have adopted titles such as Legal Director or introduced levels such as Managing Associate effectively to recognise that not all senior associates are equal and to reward long serving senior associates for their commitment and hard work by providing titles that recognises the contributions made by those senior fee earners internally whilst proving an external title to demonstrate their experience and expertise.

Many senior associates also look for alternatives to partnership by making a move directly into industry and commerce or financial service institutions. The skill sets acquired by senior fee earners is very sought after in growing and established companies and institutions alike. Whilst competition for in house positions is fierce, it is a step that a number of talented senior associates have taken and will continue to take which provides a real contrast to partnership. A word of warning though, once this step has been taken, whilst not impossible, it can be a very difficult move to return to private practice so this step should not be taken lightly.

But what of those senior associates who want partnerships? Is there ever a way to be certain that this promotion will follow and what does it really mean? In today’s market as firms seek to rebuild teams to accommodate an upturn in economic conditions, there are a number of private practice firms that will be able to offer a genuine “partnership track” for lateral associates. In essence, partnership track positions demonstrate an intent by a firm to hire at a senior level and to provide the lateral hire with the opportunity to join the firm’s partnership in a specified period providing certain criteria is met. Firms hiring at this level will usually look for senior associates who are being considered for partnership at their current firm but who have been provided with limited information as to when this promotion is likely to take place.

A lateral move at senior associate level will involve full and frank disclosure by the new firm as to when partnership is likely to occur and what steps the lateral hire will need to take in order to be able to be considered for this promotion. This all important “due diligence” stage afforded by many firms who are keen to secure the best talent at the senior end of the market is in stark contrast to the information provided by many firms to their existing senior fee earners. Such conversations can often lead senior associates to begin to really understand the partnership that they will join.

Understanding the partnership structure can often be overlooked by those senior associates who are so keen to secure partnership at their current firm they never really question the form or shape of their firm’s partnership. Few associates will have questioned the structure of their firm’s partnership when deciding to join their current firm as a trainee or a junior associate. Even to the most diligent and savvy of associates there is limited information available about such structures; often the only useful source of information is through making direct enquires. Access to partnership at one firm could mean access to that all sought after all equity structure  whereas to another firm it could mean simply partnership in name or salaried partnership with a promise to enter the equity at an unspecified point of time in the future.

Senior associates will have a number of options available, so the measure of success is no longer the ability to reach partnership. Associates should be encouraged to consider their options for future development at all levels irrespective of whether partnership is the desired goal. Timeframes for partnership can never be certain but in a constantly changing market the ability to achieve future ambitions (whatever those may be) lie in the decisions and preparations that associates make and carry out today – it is never too early to start planning for success.

RedLaw specialises in providing a high level of career advice and guidance to associates at all levels within private practice firms. For further information about the market or for a confidential conversation about your career please do not hesitate to contact Jane Gaunt, a senior consultant at RedLaw.

Jane Gaunt – Senior Consultant – RedLaw – July 2015

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