Ashurst and SJ Berwin among firms with highest rate of partner exits

The UK's top 20 law firms saw 439 partners exit their main limited liability partnerships (LLPs) in 2011-12, as firms continue to actively manage their partnerships.

Legal Week research shows 342 of the 439 partners listed on Companies House as resigning from their firm's UK LLP during the financial year running from 1 May 2011 to 30 April 2012 left their firms altogether – equating to 78% of the LLP exits and 6% on average of the firms' total partnership size during the last financial year.

The survey distinguished between those partners leaving altogether through resignation, termination or retirement, and those remaining at the firm in another capacity – either as members of a different LLP or as non-partners or LLP members.

Using firm-wide partnership numbers during 2011-12 as a benchmark, Ashurst saw the highest rate of partner departures, with 24 leaving the 217-partner firm – around 11%.

Other firms with departures from their LLP equating to at least 10% of their total partnership size include SJ Berwin and DLA Piper, with Eversheds not far behind with 30 departures, representing around 9% of its partnership.

The research also looked at LLP additions, with the group adding 669 members in total over the 12-month period through promotion, lateral hiring or transfers from other offices.

Some firms added far more partners to their LLP than they lost, with DLA Piper's merger with Australian partner DLA Phillips Fox, for example, helping the firm add 183 partners to its LLP against 77 departures. Just over 100 of these came from Australia.

Similarly, Simmons & Simmons, which saw 15 partners leave during the last financial year, added 65 – in part due to an overhaul that saw the firm introduce a fixed-share partnership role.

Magic circle firms Clifford Chance (CC), Linklaters, Allen & Overy (A&O) and Freshfields Bruckhaus Deringer all posted partner departure rates of 2-4% but, with the exception of CC, had far higher incidences of people leaving the LLP but remaining with the firm.

This reflects both the increased global scale of the firms and mobility of partners, as well as, in instances such as Freshfields, the trend for de-equitisations.

A&O managing partner Wim Dejonghe said: "Greater financial and operational discipline is definitely necessary in order to remain competitive in a low-growth environment.

"For us, it's been a question of balancing the need for growth in the global network with continued focus on good housekeeping.

"The same challenges exist for all our competitors and everyone has to make a choice about where that balance lies and what's right for their business – it's just a reality of the market we live in today."

Tony Williams, principal of Jomati, said: "I would expect most firms, particularly locksteps, to probably be churning around 5-7%.

"This is down to a number of factors, partly performance, and partly baby boomers retiring and others going to pastures new."

Slaughter and May was omitted from the survey as it is not an LLP.

Key Figures
• There were 439 partner terminations and 669 appointments across the top 20 firms' UK LLPs
• 342 partners left their firm altogether
• DLA Piper saw the highest number of departures from the firm (74), followed by Eversheds (30) and Ashurst (24)
• Irwin Mitchell was the only firm where no partners left the firm altogether in 2011-12