War for talent pushes retention rates past 90% with Freshfields looking to keep more

The UK's top firms are keeping a tight grip on their trainees, with most City firms retaining more than 90% of their newly-qualified solicitors.

Major UK firms including Freshfields Bruckhaus Deringer, Linklaters, Slaughter and May, Herbert Smith and Ashurst took on at least 90% of their trainees in February's round of job offers for newly-qualified solicitors.

Freshfields is looking to take on 98% of its trainees, up from 92% for the same period last year. The firm offered all 48 trainees a job, with 47 accepting. Linklaters, meanwhile, has retained 97% of its 65 March qualifiers and Slaughter and May is retaining 96%.

Macfarlanes will be taking on 100% of its trainees in this financial year, with 25 taken on last September and four more starting in March. The firm is also increasing its yearly intake to 30 from September 2008. Norton Rose has taken on 97% of its trainees who qualified in January.

The figures represent the financial strength of major London firms in the current market and the efforts of HR departments to boost their reputation among future recruits by taking on a high proportion of trainees. One HR head said: "We are always sad to see the number fall below 90%. A few years ago, when firms were chucking out trainees, it had a negative impact on recruitment."

One head of finance at a major firm added: "The reality is that there is a war for talent and firms cannot afford to let people go."

Top firms taking less than 90% include Allen & Overy and Clifford Chance, which are taking on 89% and 86% respectively.

Linklaters trainee recruitment partner Simon Firth said: "The primary driver is the fact that the market is very buoyant and there are a lot of places, which is different to several years ago."

Simmons & Simmons and Addleshaw Goddard both offered around 85% of trainees a job, while CMS Cameron McKenna took on only 76% of its 34 newly-qualified lawyers this year.

Outside London, national firms have fared less well, with Osborne Clarke, Hammonds, DLA Piper and Pinsent Masons retaining 80% or less of their trainees. However, Eversheds offered jobs to 82%, Dickinson Dees 85% and Wragges 92%.

Top students worry firm-specific training puts them in a pigeonhole

Firm-specific Legal Practice Courses (LPCs) are proving a turn-off for one in five students at leading universities, according to a survey of more than 2,000 students.

The survey, conducted by Legal Week's research arm, Legal Week Intelligence, found 23% of the respondents said they would be less likely to apply for a training contract at a firm-specific course, compared with 21% who said they would be more likely to apply.

The survey polled students from 16 of the UK's leading universities on their ambitions and perceptions of the leading commercial law firms.

Those students who were turned off by firm-specific courses said that they were worried about being pigeonholed.

"There is always a chance you may change your mind about what direction you want to go in, and a narrow LPC may close off certain avenues before you have even begun working," said one student.

The survey's findings will provide some encouragement for those firms that do not run their own specific courses, such as a consortium of five top firms including Slaughter and May, Freshfields Bruckhaus Deringer and Herbert Smith, which are pooling their LPC students into a course run by BPP Law School.

Law firms also face an uphill battle getting their message across to would-be recruits, who complained of finding it difficult to distinguish between the firms, only a handful of which, dominated by the magic circle, were widely known within the student community. Summer placement schemes emerged as by far the most effective recruitment tool for law firms.

Pay battle looms as City giants up salaries

City firms are on the verge of a pay war with the news that Allen & Overy (A&O) is set to raise its associate salaries for the second time in recent months, after Linklaters in April unveiled a 16% hike of its own associate salaries.

An increase in City associate salaries had been expected since last October, when A&O announced a 15% hike in pay for London associates. News that the firm is set to raise rates again may prompt rivals to review their own proposals.

A spokesperson for A&O said the situation was currently under review.

The news comes after Clifford Chance (CC) this month announced it is to increase its associate and trainee salaries by up to 15%, with newly-qualified lawyers taking home an extra £7,500 from 1 May.

CC announced in April that newly-qualified solicitor' salaries will rise from £55,000 to £63,500. One-year post-qualification experience (PQE) associates will see their salary go up from £60,000 to £66,000; two-year PQE from £70,000 to £79,000; and three-year PQE from £81,000 to £89,000.

However, the rises have received a cool reception from some assistants who complain of long hours and argue that pay at top City firms still lags US rivals.

One assistant posting on legalweek.com said: "Top UK firms have comfortably justified second-rate salaries on 'market rates' for far too long. Associates at top firms can do better elsewhere, and it is about time City firms realised this."

The article appears in the Spring 2007 edition of the Legal Week Student supplement. Click here for a full list of articles. To order a hard copy email [email protected] or ring 020 7004 7422

Legal Week Student Spring 2007