U.K. Trainees Avoid Crunch Fallout as Top Firms' Retention Soars Above 90 Percent

Eighteen out of the top 25 U.K. firms are holding on to more than 90 percent of their trainees.

Trainee retention rates across the U.K.'s elite legal profession have remained steadfast, with many firms keeping hold of more than 90 percent of their intake despite a sharp dip in London lawyers' overall business confidence.

Eighteen out of 25 of the U.K.'s top firms are holding on to more than 90 percent of their March class of qualifying lawyers, including six firms with a 100 percent retention rate.

Retention across the Magic Circle remains high, with only Allen & Overy retaining less than 90 percent of its trainees. Slaughter and May made offers to 100 percent of its 29 qualifying trainees, while Freshfields Bruckhaus Deringer offered places to 45 trainees out of an intake of 47. Clifford Chance's figure rose to 91 percent this March, compared with 86 percent a year ago.

The picture for the chasing pack and mid-tier also remains positive, with overall retention rates marginally lower than the Magic Circle. SJ Berwin, Norton Rose and Nabarro are among the firms retaining their entire intake, while Lovells, Herbert Smith and Ashurst have all taken on more than 90 percent.

Several firms including Osborne Clarke and Denton Wilde Sapte with low retention rates are a reflection of small qualifying rounds for the March intake.

The results come despite business confidence among the U.K.'s top lawyers recently faltering, as London partners anticipate the economic turmoil hitting the profession. Legal Week's quarterly business confidence poll this week has shown just 30 percent of partners are expecting double-digit revenue growth over the next 12 months, down from last year's high of 70 percent.

Nabarro senior partner Simon Johnston said: "Once you get great people in and spend time and money investing in them, you want to give them the best shot. There is uncertainty, but we do not know which way it will go and work levels have not fallen off a cliff. You cannot take a short-term view."

Norton Rose chief executive Peter Martyr added: "Playing around in the short term with trainee intakes is a dangerous game. There are few benefits and a lot of downsides."

With a potential downturn on the horizon, litigation specialist Barlow Lyde & Gilbert is well-placed to benefit from a rise in disputes. The firm is offering places to 16 of its 17 trainees.

But top national firms have shown the biggest rise in retention rates, with many of the firms which lost more than a fifth of their lawyers last year now maintaining more than 90 percent.

Meanwhile, U.S. law firms are keeping their qualifying U.K. lawyers closely guarded with many of the top U.S. firms in London boasting rates of more than 90 percent.

One Magic Circle partner close to the process said: "The market is not clear for the coming months and firms are holding onto their talent.

(Published by Law.com, January 22, 2008)