In the past, law firms put their trainees on a career conveyor belt, which took them from articles through to partnership.

At that point a comfortable retirement could be planned.

But those times are long gone.

Firms are now having to face up to the reality of unprecedented competition and shrinking profit margins.

The conveyor belt increasingly sheds its load short of the partnership table.

In many large firms, when that happens, solicitors are encouraged to look elsewhere for employment.City firm Denton Hall has this month faced up to the issue by announcing a new incentive scheme for senior lawyers yet to make partner (see box for details).The root of the problem, says William Corbett, chief executive of City firm Stephenson Harwood, is matching growth with aspiration.

In the 1970s and 1980s, any good lawyer who wanted partnership would find it somewhere.

'But growth has now slowed,' he points out.

'You can no longer meet the aspirations of every good lawyer.

The rate of growth determines the number of new partners who can come in.'There are three options, he believes.

There is the one-off move, which SH itself took, of reducing the age of retirement to make additional room in the partnership.

Secondly, there is the option of appointing salaried partners, which can only delay their aspiration to equity partnership.The final option -- and the one Denton Hall, which has no salaried partners, is pursuing -- is to remove the perceived shame and stigma of not making partner.

'If you can achieve a band of well-paid senior managers to whom no stigma or disappointment attaches, then the problem can be solved,' Mr Corbett says.The Denton Hall idea has received a cautious response from other City firms.

The concept of 'up or out' has served them well for a long time and some are reluctant to give it up.

Indeed, some fear that the usual throughput of lawyers could be upset by a scheme which encourages non-partner senior solicitors to stay.'The risk is that you will give work to these able and experienced senior solicitors that you would otherwise have given to the bright solicitors coming up through the firm,' says Terence Kyle, managing partner of Linklaters & Paines.Paul Green, Denton Hall's head of personnel, stresses that the scheme is 'not just a parking place'.

A number of the senior solicitors are now up for partnership, he says.

'We think we should keep our experience,' he asserts.

'Many firms are reconsidering whether up or out is right.

There is plenty of work to go round for both senior solicitors and other assistants.'The scheme is welcomed by Anthony Tomkins, partner at legal recruiters Charles Fellowes.

'The profession's been crying out for something like this,' he says.

And in response to the concern, expressed by Simmons & Simmons managing partner Alasdair Neil, that using personal and departmental performance as a basis for pay could interfere with the motivation to work for the good of the whole firm, Mr Tomkins says: 'Every firm has that problem today.'Mr Tomkins views the scheme as aimed mainly at those who will not make partnership.

He says firms have to recognise that they would suffer if these people left tomorrow.

'Denton Hall is being brave and honest about what we all know has been going on,' he says.

'It's saying: "You not going to make partnership but we don't want you to go."' But their new title, senior solicitor, leaves something to be desired, he adds.Peter Cole, national managing partner of Eversheds, views the scheme as a reflection of a different trend.

He sees law firms in the future having fewer partners who spend their time as managers and business developers.

In a controversial view not much shared among the City firms, he believes fee-earning work will be done by non-partners.And Mr Cole too comes back to the fundamental problem.

'When I was younger, the one goal was partnership,' he recalls.

'Not to make it was failure.

There was also client pressure to deal with partners.

Lawyer and clients now have to get away from these ideas.'BREAKING NEW GROUNDDenton Hall's new remuneration scheme, according to the firm, 'breaks new ground in the legal profession'.Historically, points out the City firm, the solicitors' profession has resisted the idea of incentive plans for those below partnership level.

But, as of a fortnight ago, Denton Hall announced that it had broken the old pattern of 'up or out' whereby the traditional progression for solicitors was 'partnership or nothing'.In a statement explaining the new scheme, the firm says: 'Denton Hall recognised that not all its solicitors would be able to go on to partnership.

Some might even prefer not to take on the associated risks and pressures.

It decided to introduce a role that would recognise and retain their experience and expertise, as well as giving them the chance to develop their careers.'That realisation translated into the creation at the beginning of the year of the position of 'senior solicitor'.

From 1 January 1996, some 40 solicitors were promoted to this new breed.

And while becoming a senior solicitor is in no way meant to prohibit lawyers from ultimately gaining partnership, it is designed to provide more incentive at assistant level.The firm has also aligned this incentive with a new form of remuneration for senior solicitors.According to the firm's statement: 'The bonus scheme is built around a deliberate linking of firm-wide, departmental and individual performance.'The scheme is funded by the improved performance of the firm as a whole.

The bonus pool for distribution is derived from performance set against profit targets, thereby emphasising team work.

If the annual profit target is met, a standard fixed percentage of salary is made available for senior solicitors.

This increases in line with over-budget performance to an upper threshold.'Once the standard bonus award has been established, there is scope for adjustment for each individual senior solicitor according to both work group and individual performance.'