The future is looking bright for September’s newly qualified solicitors. Lawyer 2B’s annual retention rate survey has revealed that, across the largest 50 firms, the average retention rate jumped from 79 per cent to 85.2 per cent in 2005. The increase in the number of trainees being offered jobs upon qualification suggests that law firms are becoming more confident about the economic outlook.
According to the comprehensive research, magic circle firms Allen & Overy (A&O), Clifford Chance, Freshfields Bruckhaus Deringer and Linklaters retained 83.8 per cent, 95 per cent, 94.2 per cent and 85 per cent of their newly qualified solicitors respectively.
Further down the pecking order, Field Fisher Waterhouse (FFW), Osborne Clarke, Salans and Wragge & Co retained all their September qualifiers. It is worth noting, however, that these firms recruit far fewer trainees than do magic circle firms. Consequently, it is arguably simpler for these firms to hold on to all their newly qualified solicitors.
Birmingham-based Wragges continues to impress, as it is the only firm able to boast a 100 per cent retention rate for its trainees in three successive years. Wragges senior partner Quentin Poole says he is not surprised by the firm’s impressive track record with regard to retention rates, arguing that this is because Wragges is big on long-term investment.
FFW graduate recruitment partner Andrew Evans says the firm’s retention rate was 75 per cent last year because the number of trainees who wanted to qualify into the litigation department outnumbered significantly the vacancies in the group. Indeed, FFW has introduced a rigorous selection process for newly qualified solicitors. In addition to two interviews, trainees must now also sit a written test.
The picture, however, is less rosy for newly qualified solicitors at Stephenson Harwood and Withers, which had retention rates of 54.5 per cent and 69.2 per cent respectively. Stephensons, which said goodbye to five out of its 11 trainees, blames its poor performance in the survey on its 2002 merger. The firm argues that, following the merger, its trainee intake jumped to 40 as it inherited around 20 trainees. It now intends to recruit fewer trainees in the future, so this may improve its retention rate.
In 2003 and 2004, Denton Wilde Sapte (DWS) held the unenviable record of letting the highest number of trainees go. But this year’s survey revealed that the firm has held on to a larger proportion (72 per cent) of its trainees.
The good news for those trainees who were not offered jobs upon qualification is that the vast majority of them secured jobs at other firms. However, newly qualified solicitors at DWS and Sheffield-based Irwin Mitchell have had less luck landing positions elsewhere. Of the 12 DWS trainees who were not offered jobs, only 45 per cent of them have secured jobs at other firms. Meanwhile, only half of Irwin Mitchell’s departing newly qualified solicitors have been taken on by other firms.
In some instances, of course, it will be the trainee who, come qualification, is sprinting to the door rather than being shown the boot by the senior partner. But it is most likely that the vast majority of the 212 newly qualified solicitors who left their firms this September would have wanted to stay.
Lawyer 2B’s survey revealed that corporate continues to attract the biggest proportion of newly qualified solicitors. Indeed, thanks to the recovery in the M&A market, 21 per cent of trainees qualified into corporate compared with 19 per cent in September 2004. And as you would expect, the jump in newly-qualifieds in corporate coincided with fewer trainees qualifying into litigation. The number of trainees qualifying into litigation dropped from 17 per cent in September 2004 to 14 per cent this September.
In total, 1,230 trainees did make the grade and stayed put. Those staying will earn on average 47,600. The good news is that the number of newly-qualifieds earning 50,000 and above has increased from 29 per cent to 40.9 per cent. Meanwhile, the number of newly qualified solicitors earning between 45,000 and 49,999 has dropped marginally from last year’s 50 per cent to 45.4 per cent.
However, the magic circle firms continue to pay the highest salaries. Freshfields and Linklaters both pay their newly qualified solicitors 52,000 per year, while A&O and Clifford Chance pay 51,000 annually. This year, Lawyer 2B also asked the top 50 firms for the male-female split of those trainees who qualified this autumn. The survey revealed that the majority of newly qualified solicitors (57 per cent) were female, while 43 per cent were male. The finding supports the anecdotal evidence discussed in the May 2005 issue of Lawyer 2B, which reported that women made up 62 per cent of trainees in 2003-04. So if this is the case, why are partners predominantly male? Linklaters graduate recruitment partner Olivia McKendrick admits that it will take a long time for the women to filter through, but argues that initiatives such as flexible working arrangements should help.
The survey also revealed that the average associate turnover rate at the top 50 firms is approximately 14 per cent for the 2004-05 financial year. So although the vast majority of trainees have stayed put upon qualifying, many of them will be leaving their firms before they reach partnership.
THE MAGIC CIRCLE
Trainee retention rate (%): 85
Male/female split of newly-qualifieds (%): 50/50
Assistant turnover rate (%): 20
Newly-qualified salary: 52,000 (last reviewed 1 May).
Bonuses: All trainees and associates are eligible to a performance-related bonus. Amounts vary according to the performance and contribution of the individual as well as the performance of the firm in the financial year.
Appraisals: Usually one-to-one meetings between partner and associate. For trainees it is a meeting with their principal (supervising associate), which takes place at the end of each seat.
Partner progression: 32 partners made up on 1 May; youngest partner is 31 years.
Flexible and part-time working: Offered.
Holiday: 25 days for trainees and associates, plus extra day off to work within the community.
THE NATIONAL FIRM
Trainee retention rate (%): 75
Male/female split of newly-qualifieds (%): 47/43
Assistant turnover rate (%): 17
Newly-qualified salary: London 50,000; Leeds/Manchester 34,000 (increased September).
Bonuses: Entitled through individual productivity and ‘value’ activities completed in addition to fee-earning.
Appraisals: Mid and end-of-seat reviews with supervisors for each of the four seats. Also ‘progress chats’ with a graduate recruitment team member during each seat.
Partnership progression: After around seven years’ PQE and depending on performance; 10 partners made up in 2005; youngest partner is 32 years.
Flexible and part-time working: Offered.
Holiday: 25 days (employees can also buy or sell up to five days, although trainees cannot).
THE REGIONAL FIRM
Wragge & Co
Trainee retention rate (%): 100
Male/female split of newly-qualifieds (%): 33/67
Assistant turnover rate (%): 21
Newly-qualified salary: Birmingham 34,500; London 49,000.
Bonuses: Annual performance-related bonus for all employees, directly linked to the firm’s annual turnover.
Appraisals: 360 appraisals.
Partner progression: Three partners made up in 2005; youngest partner is 33.
Flexible and part-time working: Available; 21 per cent of staff have flexible working arrangements.
Holiday: 25 days, increasing to 27 after 10 years’ service, and to 30 after 15 years’ service.
Click here to view table: ‘Trainee Retention Rates at the top 50 UK firms’