The number of trainees being kept on by the UKs top 50 firms has dropped by nearly 150, despite law firms saying they are in desperate need of associates.
The average retention rate in the top 50 firms was 81.2 per cent in September 2006, compared with 85.2 per cent in 2005. Almost half of all firms recorded a retention rate lower than average, with Nabarro Nathanson keeping on just 8 (47 per cent) of its 17 September qualifiers dropping from 84.2 per cent the previous year.
Nabarros graduate resources manager Jane Drew said: This has been a very unusual year. We usually retain 85 to 90 per cent of our trainees. This year, of the nine that went, five wanted to qualify into employment but there was no business need for newly qualifieds. All of the five were offered alternatives in other areas, but chose to go elsewhere as they wanted to practise employment law.
Osborne Clarke saw the biggest drop in retention rate between 2005 and 2006, retaining only 61.1 per cent of its trainees this year compared with 100 per cent in 2005.
Managing partner Simon Beswick told Lawyer 2B: Its because a whole rack of them wanted to do commercial work, and we didnt have the opportunities in that space. I think most of them have found jobs elsewhere, if not all.
Beswick added that Osborne Clarke had more vacancies than trainees and had offered jobs toall its September qualifiers.
Macfarlanesgraduate recruitment manager Louise Hatton explained: We recruit trainees with the aim of keeping everyone on after qualification. Were quite painstaking in ensuring that consideration is given to the trainees career development.
Beachcroft, Salans and Field Fisher Waterhouse, all of which kept on all of their 2005 qualifiers, each bid farewell to one trainee this year.
Withers saw the highest increase in trainee retention, keeping on 12 of its 13 September qualifiers in 2006 compared with only nine in 2005.
Corporate continues to account for the bulk of newly qualified jobs given to trainees, but is also losing ground to banking and finance.
Just under a fifth (19.4 per cent) of retained trainees qualified into corporate in 2006, compared with 21 per cent in 2005. Meanwhile, 17.5 per cent of qualifiers joined banking and finance departments, a rise from 16.9 per cent the previous year.
Spotsinlitigationand commercial also rose, with litigation now accounting for 14.5 per cent of all jobs and commercial 5.7 per cent.
The magic circle accounted for the bulk of the banking and finance jobs. Allen & Overy gave 28 trainees places in its finance department; Clifford Chance offered 31; Freshfields Bruckhaus Deringer gave 14; and Linklaters offered 18.
DLA Piper retained the most trainees of any firm in the top 50. It offered jobs to 63 of its 80 qualifying trainees, of which 59 accepted places. Just behind was Eversheds, where 58 out of 60 trainees accepted jobs and 74 qualified. Eversheds gave more than a quarter (17) of its trainees jobs in the corporate department, in reflection of the firms strategy to grow corporate work.
All of the firms in the top 50 increased newly qualified salaries this year. Many City firms now offer 55,000, although this drops to 48,000 at firms such as Charles Russell and Hammonds. Salaries at regional firms in the top 50 start at Dundas & Wilsons 33,000; the average regional salary is around 35,000.
Just two firms in the top 50, Hill Dickinson and Shoosmiths, ask trainees to repay maintenance grants and other funding if they do not stay on after qualification. At Hill Dickinson, trainees have to repay their funding in full if they leave during their training contract, if they reject a place in the firms North West offices or if they leave a North West office within 12 months of qualification.