A couple of weeks ago we reported that things were “ugly” at top-tier firm Allens Arthur Robinson after we had received the following rumour from an anonymous AAR spy:
allens melbourne has now lost 6 juniors (and a junior SA) from its corporate team in a month. Morale is so low partners have been individually talking to lawyers to discuss what can be done to improve the situtation.
Soon after publishing that rumour, we received the following anonymous comments from another AAR spy:
Story about AAR is wrong – only a couple of people have left- you should correct your story.
We of course were left pondering which anonymous spy was telling us the truth. Had a swathe of juniors departed, or just a couple? With thanks to the AFR Partnership Survey, we now think it can safely be assumed that the former spy was being truthful.
In the AFR Survey, the following is reported:
While partnerships at large firms were decreasing, [AAR chief executive partner] Mr Rose said opportunities would arise for senior associates as big swathes of baby boomers who became partners in the 1970′s and early 1980′s retire.
However, earlier in the AFR Survey, the following is reported:
The downturn “has caused a shock to the system and that is causing everybody to reassess the fundamentals of the business model”, said Allens Arthur Robinson chief executive partner Michael Rose. “For the last 20 years we have been able to rely on revenue growing, the size of the firm growing, stable partnerships, pretty predictable staff turnover and regular rate increases. I think all of those things have changed.”
So what about the operating assumption that … senior associates will eventually be made up to the partnership?
In the AFR Survey it is reported that AAR has 254 SAs compared with 186 partners, a ratio of 136.6%. This ratio is worse only at Blake Dawson (by 1%), meaning that only one other major law firm has more SAs compared with partners than AAR. The conclusion (we think) that can be drawn from this statistic is that AAR has many more SA waiting for the assumed passage of SA to partnership to take effect. But will it?
The AFR Survey reports that the AAR went from a partnership of 193 in July 2009 to 186 in July 2010, a reduction of 3.6%. This compares with reductions of 5.8% at Mallesons and 11% at Clayton Utz. So when AAR CEP Michael Rose that opportunities of partnership ascension will present to expectant SA’s at some distant, vague point in the future, should SA’s be concerned that the partnership will instead take the opportunity to further reduce the partnership (like competitors) and thus preserve the value of its equity points?
And what about the conflicting reports that many AAR lawyers, including an SA have left the firm, compared with only “a couple”? We think it is more likely that “many” young AAR lawyers are starting to see the writing on the AAR wall.
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