Well do you? According to comments from lots of recruiters, the answer is no!
Until his early retirement in the 1970s, my late father-in-law was a partner at a well-known establishment law firm catering for the rich and landed. His ill health prior to retirement was not due to his work, and he was in most material ways very comfortable. The family lived in an idyllic country house with a huge garden and sufficient parking for four cars. Beyond in the paddock were two horses. His children were privately educated. He did have unlimited liability for the firm’s debts, but that did not seem to bother him and in reality never proved to be an issue. Family holidays involved overseas travel, usually by ship.
How would his working life compare with that of today’s Partners?
I expect many partners now have a similar lifestyle full of material “success”. Except that, when my father-in-law was on holiday, he did not have to contend with e-mail and mobile telephones. He did not, I’m sure, concern himself with time-recording targets or billing budgets or collection targets. His clients probably were not regularly approached by other firms trying to poach them. It was very unlikely that, short of some truly awful behaviour, he would have been asked to retire from the partnership, whatever his billing figures. It is also unlikely that his clients routinely challenged his fees or sued him for negligence. Cross-referral drives, which are common now, might have been done with a good chap over lunch at the Athenaeum. Key client programs had not been invented and would have been considered unnecessary. Clients definitely did not want to know what he did in his time off, and this would not have been plastered over the firm’s web page.
His firm had a set of loyal clients who could be handed on to the next generation of partners, for the comfortable process to start over. Equally, employees did not move from one job to another every two to three years, unless you really upset them.
I am probably seeing the past with rose-tinted spectacles, but there is no doubt that partners today work a lot harder. Clients’ expectations for speed of service have risen and they are more comfortable challenging professionals. Business development is now part of the lexicon. Apart from winning a client and doing a good job, you need to ensure that they do not wander off with another firm. This has all lead to a more competitive market, which is great for clients, but bad for profit margins. Of course, this means that a really good partner, who can win clients, service them to a high standard and stay on top of the law, succeeds. The possibility of client movement rewards the best and punishes the less able.
Since the 1970s, the legal market has changed. Large international law firms arrived during my lifetime. Chances are my father-in-law knew all his partners by name. In larger firms this is most unlikely and in international firms almost impossible. The advent of larger firms has also made it possible to keep on 10-year-plus solicitors at larger salaries without ever making them partners. In the old days, the route to partnership was mutually convenient. Firstly, partnership was relatively attractive given regular profits from existing clients. Secondly, the firm concerned was not exposed to those high salaries. In large firms today, until the recent recession at least, it seems a good idea to employ someone for £100k who could bill £500k rather than make them a partner and share that billing.
Similarly, senior fee earners today may not wish to jump into partnership as they can see the risks. Profit fluctuation could mean non-existent earnings. Winning clients constantly is tough and the likelihood of being sued has greatly increased. Also, a partner who is weak with time-recording and billing has little protection if the firm decides to move them on.
For small firms, this unwillingness of senior fee earners to embrace partnership may be their undoing, if new partners cannot be found to carry on the firm and the Professional Indemnity Policy. Closing the firm down is very expensive. For one thing, six years’ run-off PII is required. Those firms who default increase the insurance cost for all firms.
Firms may need to think differently going forward. Rather than looking for a new crop of partners to pass the business onto, they may need to consider remaining as “shareholders” and “employing” senior staff to take the practice forward.
BigWig Legal Network
What is BigWig Legal Network?
The deregulation of UK legal structures will have a huge impact on how Law is practised and new legal services are offered. BigWig Legal Network is the UK’s first membership development organisation for fee earners in legal practices, priced for membership affordability, that will offer what legal professionals desire most of all: Accurate, dependable new insights and techniques for developing the legal services of the future.
Find out more at our Last Wednesday meetings.