The number of partners at UK law firms rose significantly this year as the rate of ‘firing and retiring’ fell, according to a survey by an accountancy firm.
Figures show an overall net increase of 2,795 partnership posts this year, reversing the net loss of 153 partner roles seen in 2011/12, a report by Wilkins Kennedy says. A key factor behind the rise in partner numbers was that 44% fewer partnership posts terminated than in the previous year. In 2012-13, 3,077 partnership posts were closed, down from 5,487 the year before that.
The figures also show a 10% increase in new partnership roles being created, with 5,872 posts started this year, up from 5,334 in 2011/12.
In total 38,740 partners were practising at UK law firms in 2012.
Wilkins Kennedy suggests the findings show that the worst of the downturn may be over for many firms, although problems may still remain at the smaller end of the market.
Tommy White, partner at Wilkins Kennedy, said: ‘Although many firms are still adapting to the more challenging market conditions, this marked fall in apparent firing and retiring of partners at UK law firms is perhaps an indicator that the stop-start restructuring and cost-cutting of the legal sector is now past its worst.’
Explaining the reasons for the change, he suggested: ‘On the one hand, after the unprecedented partner redundancies and forced retirements which have taken place recently, most firms have by now already taken the opportunity to offer early retirement to those partners that perhaps were not performing and contributing to profitability.
‘At the same time, more partners who near retirement age, but are still generating income for the firm, are deciding to delay their retirement - where their existing partnership structure permits.’
But White notes that the attitude to partnership of many associates is changing with many no longer seeing it as the pinnacle of their career.
‘Associates are starting to question whether partnership is really the be-all and end-all for their careers. Some are seeing a salary and bonus arrangement based on their own personal performance as preferable to what can be the much more volatile earnings of a profit sharing partner,’ he said.