PROMOTIONS: rise in the number of non-equity appointments as alternative to partnership


City firms revealed a 'cautious approach' to the year ahead in this month's partnership promotion rounds, as many appointed fewer lawyers to the partnership than last year.



Experts said this was likely to be a result of concerns over the economic climate, as well as a toughening up of the standards demanded for equity partnership.



In the magic circle, Allen & Overy made up 28 partners globally this year, compared to 32 in 2007. Only eight were made up in London, compared to 13 last year. Clifford Chance promoted 35 worldwide, down three from last year, with 11 in London, two fewer than in 2007.



Slaughter and May promoted four, down one from last year. Freshfields Bruckhaus Deringer made up 28 worldwide with ten in London, the same number as last year. Linklaters announces its figures later this month.



Non-magic circle City firms also saw a drop in partner promotions. Lovells made up 13 fewer partners than in 2007, with 18 promotions, six of which were in London.



Herbert Smith promoted double the number of partners worldwide compared with last year, with 18, but only eight were in London, as last year. Trowers & Hamlins promoted just four to the partnership, compared to 15 last year, while national firm Pinsent Masons made up three fewer than last year, with 17 promotions.



National firm Addleshaw Goddard bucked the trend, increasing its promotions by four, to nine new partners.



Firms also continued the trend towards non-equity promotion. Allen & Overy appointed eight senior associates to the role of 'counsel', which was introduced in 2006, while Addleshaw Goddard promoted ten lawyers to the role of 'legal director'.



Tony Williams, management consultant at Jomati, said the slight fall-off in partner promotions was 'probably for economic reasons'. He added: 'It is inevitable that firms are feeling more cautious given the uncertainty going forward. What is not clear from the figures is how many partners are actually going into the equity partnership, and how many are on a fixed salary. There may well be greater use of non-equity status.'



Nick Jarrett-Kerr, management consultant at Kerma Partners, said: 'The slight drop-off in new partner promotions will be down to firms being very cautious about what this year holds in economic terms.' He added that some of the larger City firms may be concerned about a fall in the number of 'mega-deals' being completed.



Jarrett-Kerr said the trend for new, 'cosmetic' titles as an alternative to partnership has been in place for some time, as firms increasingly see a firm's equity as a 'precious commodity'. He added: 'We are seeing more flexibility in remuneration structures, with more bonuses or performance-related pay.'



He added that many firms had 'ramped up' their assessment processes for equity partnership. 'It could be that fewer people made the grade this year,' he said.



Rachel Rothwell