Generational/Structural Change at Law Firms and its Effects?

Discussion in 'Commercial Awareness Forum' started by Matt_96, Sep 6, 2019.

  1. Matt_96

    Matt_96 Standard Member

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    I couldn't remember if there was an article on the website about this already, but I think this is a key issue that law firms are facing and wondered if anyone wanted to share their thoughts as we get ready for application season. Please note that I have not done any specific research before writing this, and have just based this off of things I've read, heard at Open Days etc., as well as my own opinions.

    For me, generational change is about how law firms engage with recruiting and keeping talent. In previous times the rigid 'up or out' system that we are fairly used to was the only model practiced at law firms, and while the work is still hard and the competition to reach partner is still fierce, it is now recognised the old system has led to a lot of excellent (but probably burnt out) talent being lost. Larger firms appear therefore to be doing more to keep staff feeling happy and supported, albeit in very different ways:
    • On one hand, you can see this in the "Magic Circle" approach. This approach encapsulates firms, like the Magic Circle, that invest heavily in lawyer support services, diversity & affinity networks, as well as technology-enabled flexible and gig-working. I personally think that whether this has been successful or not is an open question: a lot of firms pay lip service to making the workplace more people-friendly, but unless you have childcare commitments, I do not think there is a huge difference between working hard till 1am at the office, or in your bed.
    • On the other, I think we can clearly see a "Kirkland" approach. The Kirklands of this world are, like the eponymous firm, generally American and generally paying outrageous salaries at every level. There is probably less investment in support services here because of the lean nature of many of these firms' London offices, and the expectation is that the money makes up for the lack. Several firms seem to have opted for the Magic Circle approach because they cannot/do not want to compete with Kirkland et al's fluctuating dollar-pegged pay packets. It comes down to the idea of "you will work just as hard, but even though you will be paid slightly less than the top of the market, you will be far better supported."
    Structural change to me seems more varied. The traditional legal career of trying to stay as a solicitor in private practice for as long as possible is no longer the only option. Becoming the in-house counsel of a business, which is where a lot of the 'out' typically ended up, is no longer seen as a career-ending move - many general counsel are recruited from the partnerships of top law firms, and you can now see movements of lawyers going the other way and back into private practice. Some larger corporates now offer training contracts to some employees, but it seems that this is only something offered to those who have worked there for a large period of time.

    Another feature that has changed is how firms approach partnership:
    • Some firms have chosen to double down on the traditional lockstep model, such as Slaughters, and it does have its benefits. Keeping a firm's culture collegial and the income of its partners relatively equal limits egos and other destructive behaviours, and promotes consensus and long-term strategic business planning.
    • On the other hand, money talks, and a lot of partners and senior associates near partnership level are finding it hard to ignore the whispers in their ears of highly lucrative but short-term mega contracts at better-funded US giants. I think an article I read in Legal Week quoted one associate as being called by recruiters for different US firms up to 5 times a week.
    • Equally, several firms have begun adopting equity/non-equity partner splits. This appears to me to be a double-edged sword. It allows ambitious associates who have no designs on going in-house to reach partnership a lot faster, but denies them the real rewards they have been seeking for several more years. I also think it stymies change within a firm. Existing equity partners have little incentive to change the direction of the firm's strategy when newer voices are only given a token stake in the outcome.
    So what do you all think? What will the effects of all these changes be on law firms? Slightly more shamelessly, how would you make these points in an application?
     
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  2. Abstruser

    Abstruser Legendary Member
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    All really interesting points, many of which I agree with!

    I don’t think there’s a clear cut way to make these points in an application unless the question allows for it. But I remember there was a TCLA member a while back who wrote about generational change in her A&O app, answering “How do you think the legal sector will change in X years?”. She made it to AC if I remember correctly.

    There’s definitely more scope to discuss these points at the interview stage though. In one of my interviews I asked the partners whether they thought their firm’s recent shift away from lockstep remuneration had affected the culture between partners, teams and the firm generally. That prompted a very interesting discussion! I also asked, in another interview, what the firm did to help NQ associates make the transition from trainee to associate. That led to another great conversation about retaining talent generally.

    It’s great that you’re already thinking about these issues in such depth. I wouldn’t try to artificially force these points in, say, a 250 word cover letter, unless the question does allow room for it. I would save these kinds of issues for the interview - they really perfect material for questions to ask at interview :)
     
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  3. Matt_96

    Matt_96 Standard Member

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    I decided to write my thoughts down because I wanted to focus my mind whilst looking to answer that exact question for A&O this year, as it is something I remember being talked about briefly at an open day. My actual application is slightly different to this, which is just a collection of thoughts really.

    Those are some really interesting questions. If I get that far I'll be sure to ask something like that. My go-to thought provoking question for any interview is just always "what do you wish you had known when you started the job?"
     

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