Is Partnership Still a Job for Life in Law? Simon Marshall on the Hard Truth Facing Law Firms

0:00Rob Hanna:Okay, hello everyone and welcome to today's conversation that really gets to the heart of something law firms are wrestling with right now. So for years, the career story in private practice felt relatively clear, even in my late grandfather's years. Associate works towards partnership. Partnership meant status, it meant security, it meant long-term commitment, the badge of honor. But the story looks far less certain today because the tension is now showing up at both ends of the spectrum. associates are questioning the path partners are questioning the destination and both ends of that talent ladder start to lose confidence in the model and is no longer just a people issue but potentially a leadership issue a brand issue and ultimately a business model issue so my guest today the wonderful brilliant Simon Marshall founder of TBD marketing which I'm sure you've all heard of unless you've been sleeping under a rock does some incredible work has been gathering unfiltered data from across the UK market on the latest partner survey to give us a real honest look at what senior lawyers are really thinking about in terms of loyalty, recognition, succession, growth, and where the partnership is still the job for life.

1:10Rob Hanna:So Simon, a very warm welcome back to the Legally Speaking podcast. Let's get into the truth.

1:16Simon Marshall:Yeah, thanks for having me, Rob. I'm super excited. Always a pleasure to be a guest to yours as well. And it did wonders for me last time I was on in terms of improving my profile i'll never forget how kind it was for you to have me on thank

1:27Rob Hanna:you oh it's an absolute pleasure and you're a true community spirited person like myself and it's always good and as i always say my listeners watchers will be fed up with me saying it collaboration is domination but anyway this is about you so let's start with the headlines sign one in five partners are not sure they still want to be at their firm in the next three years So for people who still think partnership equals basically the end destination, how significant is that number?

1:56Simon Marshall:Yeah, I mean, that's a great question. Some people have said to me this week on LinkedIn and other places face to face in quiet rooms, Rob, I was expecting it to be higher. right so we're worrying about one in five but i did get a legal journalist who went to me and went what the heck right like so you know it just depends like who you hear it from and where you hear it in the context as well now look the first thing is it'd be good to know what the average tenure is of a partner i think at a law firm anyway like how long are they actually there for and my sense is it's dropped over the years we tried running the data a while ago from linkedin it's patchy rob right you can't really work out how long people are there for very easily Are there other tools available?

2:36Simon Marshall:Do I think the Law Society have got those details? I think they do with the diversity tool as well. So I'm going to go and look further for that data. But what would I expect it to be? How long are people there on average? Is three years a long time in a partnership? No, it's not, right? The length of the drag to get through the partnership is way beyond that three years. So, you know, it's a bit of a worry. But, yeah, I think it's also, it doesn't surprise me, it's also shorter than the average managing partner term, right? So some people are just saying, I don't really like the way we're going.

3:08Simon Marshall:And what they're really saying is I'm going to vote on my feet, if that's the case as well. So I think it is incumbent on management to look at that figure and go, wait a minute. I want to make sure that I manage this business as well, so that people don't want to stick around here for at least the term that I've been voted in for by these people. So that would be good. But yeah, am I really worried? No. I think there's also, as you know, given the nature of your underlying business on the recruitment side, right? What people say and what people do are different things, right? So a lot of people say, I don't want to be here in three years' time, but then maybe they will be still.

3:42Simon Marshall:There's a split, Rob, as well, between equity and salaried. So if you look at the equity guys, they've made it in. They made it to that upper echelons of the firm, as it were. They're going to be here in three years' time unless they're retiring, unless they get headhunted by Paul Weiss, whatever. right that's that's yeah that is kirkland you know wherever right that that's absolutely fine money talks but for for the salary partner this is the real this is the real challenge i think the higher the figure is slightly higher than one in five for that salary group yeah no again thanks

4:12Rob Hanna:for for sharing that giving some extra context obviously i teased in the intro about the sort of dual tension um because associates now and again i'm seeing this in the recruiting side of the the business as you sort of kindly mentioned you know associates becoming less certain about whether it's the path to partnership, while partners themselves, as I say, are seeing themselves less certain about actually that destination once they get there. So are firms facing a deeper credibility problem in the career narrative than they have been selling for many years before?

4:43Simon Marshall:Definitely. 100%. For me, it's the core finding of the whole of the server. The thing that we, you know, it's like a piece of rock. It goes all the way through the survey. But it's explicit in some parts, but, you know, it just sits in every answer is that that model has changed. And you may have seen, I highlighted the length of drag to make it into salaried has got longer. It's gone from eight to 11 years over the years I've been working. The length of drag from go from there to plateau has got longer. Right. So the conditions in which we were asked to offer the carrot, like come along and work hard and do these things and join the partnership, it's got harder.

5:23Simon Marshall:It's got longer. The hours have gone up and we're expected to do it for longer.

5:27Rob Hanna:And previously, Rob, people were selling their 20s.

5:30Simon Marshall:Now they're selling part of their 30s to get into salary. And then you were hoping in your 30s you'd make equity. It's probably going to be in your 40s now instead. So you see that elongation has changed that as well. And the model has worked on the promise of partnership. eat promise of partnership even when it's not likely to materialize well we both know long enough in the tooth to know that look people are going to go to other places and i think it's something that we can learn from the currency firms you know a tap on the shoulder and just want you to know si it's not going to be you right it's not going to be you but we're going to do everything in our power to make sure you end up somewhere where you're one of our best friends and we're going to work with you going forward you're going to refer work to us or you're going to be somewhere where you're comfortable and happy and you're we're comfortable happy there's no rush but we want you to know we can have a mature conversation with you about it as well and i think at law firms rob i'm not sure those conversations happen in quite the same way right so a few more thoughts for you i think firms have got really big and very profitable on the back of the nature of that model it's quite hard to unwind that position right but there are quite a few factors going on at the moment that mean they need to start thinking about selling a slightly different vision of it ai of course i had to say ai within the first minutes of the podcast but it is it's changing our world right ai from the client side ai from our own side right the al the alternative legal service buyers alsps who are providing talent you know on a different hourly rate on a different set of terms and conditions a different you know basis well that's changing the model outside investment you knew i was going to mention pe as well but not just other forms of minority states that's changing the nature of that offer i wrote a piece last week and the week before around the you know how we're seeing exactly that model changing juniors not going to come into partnership seniors wanting a payoff for all their years of being in there so um another couple of things that really are changing that model as well as you know the in-house teams are evolving they're doing things differently they're taking on that talent rob themselves they can pay people really good salaries to come in and work really really hard and and sweat the assets externally but but you know maybe they're using different services to kind of fulfill their needs on the legal front now.

7:37Simon Marshall:They've got variety, whereas previously they might have had in-house or private practice. They've now got so many different options available to them. I think that's changing the nature of partnership as well. So, yeah, I think there's probably need for a reassessment about what it means to be a partner or to be joining a firm nowadays in 2026, 27 compared to what it was like just 10 years ago.

8:03Rob Hanna:Yeah, I mean, great, great points. And I mean, just picking up on the coming up from the legal careers, because that's where I can talk to the most. I think it's exciting. I look at things from an exciting lens in terms of typically when people say I've had a legal career, like you say, so I have a private practice way up to partnership or indeed maybe they hopped in house. Now that can mean so many different roles that are going to come over during this AI revolution. Yeah, yeah, absolutely. And, you know, there's so many ways that you could still connect with an industry or a profession that you are most, you know, you wanted to be part of.

8:33Rob Hanna:Obviously, because the industry has also lost a lot of people due to perhaps not being flexible or not being able to work with family life, all of those various things. But despite all of this, 96 % of this is coming, I think, from your data, 96 % of partners still say they would recommend their firm as a place to work for. So what are we really looking at here? Is it disloyalty to firms or is it dissatisfaction with the general structure of partnership itself?

8:58Simon Marshall:Yeah, I'm so glad that you asked about this one. There's a lot going on here. why is it we've got this dissonance and you know this sense of maybe some disillusionment about the nature of you know becoming a salary partner or becoming an equity but actually we're going to recommend a friend of ours to come and work here as well right so one we didn't ask with any specificity about what they would recommend people do at the firm so let's be clear we didn't say you want to come here and be a salary partner that's fair right we asked them would you recommend a job at the firm or a role at the firm to come and do it so that's that's one part of it two and this is a really important point i think for everyone who's listening we there's another stat that sits behind that 96 % is have you recommended it to a friend have you recommended it to a family member and that drops then to about 65 % so what people just say they're going to do or they're willing to do and what they have done there's that dissonance creeping in immediately and I was thinking about this this morning ahead of the call and I wonder if it's a bit like being part of a family Rob right you and I might bicker right and I'm annoyed about it it's that right but actually i'm going to defend it to the outside world you know wait a minute don't think of my brother robbie right and i wonder if it's a bit like the two questions are one of them is me versus you and the other one is us versus them and there is a deep psychological point that sits behind about the nature of that um in it's called social identity theory and that's what's going on with the difference between those two questions right so 96 say they'd recommend a job at the firm 65 % of them actually have done so right and so there's a dissonance there but actually the overall happiness I'm not going to be here in three years time 20 % are not going to be there some of those people are saying I'm not going to be here but I'll recommend a job here okay you know I can think of a firm I worked at Rob I would have happily recommended a job for a lawyer to be there but I wouldn't have recommended working there in the support functions and so that that I would have been a yes and a no I would have been one of those people putting on the spot here a little bit sort of you know i'm not going to name the firm before you no no no no what would

10:55Rob Hanna:you be what would be your educated guess if it was to be you know you mentioned you you know disclaimer not the role but let's just say the fee earning capacity what do you think those stats would look like how far off what you've acquired do you think it would be so for these stats they

11:11Simon Marshall:are they are they are uh they're all fairness with us they're only partners we asked for this survey right so that's that but in terms of sorry it's the question in relation to like whether or not they would recommend it in a fee-owning capacity.

11:23Rob Hanna:Yes, yes.

11:24Simon Marshall:Yeah, yeah, that is a very good question. I think that those firms are normally set up to be good for lawyers for the most part. Some people disagree. They've gone on to found their own firms and do amazing things, right? And I work with some of those people, you know, as well. But I would say for the most part, law firms do work quite well for lawyers in relation to that. They certainly have done up until now. Do I see that there have been some challenges around the nature of pay for an AD or a super senior associate versus a junior salary partner I do because the expectations on the partner base are huge and they are huge on the associate base by the way as well but they're complex on the partner as well but there's not enough differential to convince people to take the leap Rob you know it's like you know William Peake once said to me how do you convince a successful partner that they need to own another Porsche you know what I mean it's like it's such a great line isn't it's like look life is we're quite comfortable here sorry why do I need to go to all this extra effort to achieve what is materially a 10 % difference on that AD price and as far as they can see it for a while it's not going to get much better until they get into the equity it's a long way away so yeah I think the answer to that question may depend a bit on where you are in the in the career scale

12:36Rob Hanna:as it were as well yeah no very valid yeah an interesting point okay let's talk about the

12:40Simon Marshall:fairness score now around you how quickly just go back on the there's something as well that we've got to be aware of right the leverage like it leverage is is is um maybe within law firms is broadly around like 10 to 1 right it depends on how you look at it if you're looking at equity or salaried versus other people who are in the firm right but there are some ratios there but we've got to remember that actually we we've we've got a lot lower leverage than you would do in an accountancy. So in an accounting firm, it might be 20 to 1, 23 to 1, Rob. So what we're seeing is we got partially addicted to these super salaries, right?

13:18Simon Marshall:The equity partners are entitled to earn. They work incredibly hard for their money, right? They deserve it. But also, if you're in an accountancy firm, you wouldn't question this at all. You know, some people say, I'm never going to make partner. But what we're going to do, Rob, is make sure that people feel comfortable going, I'm never going to make partner. But that doesn't mean there's not a job here for me. right that was the promise of the ad role rob right is that we could is that we could stand still not stand still like not do anything new but not have the ambitions during the partnership and still be a valuable um a member of society i think we need to do more with that area of the role maybe some of the people who are salary partners well they might be in that class instead like if people just want to you know i'm happy doing what i'm doing i like the recognition of the role but i don't want to be the responsible ones for doing rain making or bringing the other stuff just a thought for you on those ratios 20 20 to 1 versus 10 to 1 this i think that pe and outside investment may well change those figures over the next few years we're going to see leverage

14:14Rob Hanna:increase and i think it's important isn't put things in in context and also compare because like you say when you put those numbers together you know you can actually try and pick out some yeah okay you know not not necessarily as big numbers as over there on the accounting side and equally to yourself everyone is an individual you know and it's trying to to treat people as individuals and perhaps put them in roles that they're most suited to and want to do um you know then you're going to bring out the best of people and hopefully keep people and all of that good stuff i was touching on the fairness score around sort of how contribution is measured as one of the most sort of revealing findings so again going into the data an average of 2.6 out of 10 is exceptionally low so does that point to a comp problem or is it more about wider failure to define what truly the firm values yeah um a bit of both i think and i'm going to give it a little

15:06Simon Marshall:bit of emphasis so the comp problem let's do with that as i said i think we have probably we've we've distorted the model away from salaried and towards those upper echelons uh to retain uh ad senior associates as well and actually strangely even their ratios compared to an nq and not what they were years ago right they don't earn the multiples they used to a while ago and some of those people popular pqe plus 10 must be thinking think about the value i add versus some of these nq and then the firm would say yeah try attracting that talent though if we don't pay them this right so on the comp problem yeah a really difficult one for management teams brains much bigger than me to wrestle with that issue right but is it a failure to define what the firm truly values definitely and here's the zinger and I haven't said this out loud to anyone I think it's impossible to resolve Rob and here's why because if we all agreed what those metrics were can you imagine one we've got a series of law firm partners who are paid to you know point out what it is that there are holes in the system and two they're going to value the thing that they do the best so if there's somebody who's all into ESG or you know working the diversity committing or making sure that their the future talent the firm is secured, then guess what?

16:18Simon Marshall:They want a weighting that rewards those things. And you've got other people maybe sitting in a different team who are like, well, I'm a corporate beast and I bring in, you know, all of this red meat for everyone to eat and that's how it is. Guess what? They're going to want hours rewarding and, you know, maybe some present tears, but actually just some hard dollars as well. So here's the thing. They've got to vote for that remuneration structure to work for all of them. And for some firms who've already got one that works for the type of partners and they're of that ilk, great and I'm really really happy for them but for the people who are just starting out great because they can define their culture is that Warren Buffett who says you know show me a remuneration scheme and I'll show you a culture right but I think it's a brave managing partner who tries to resolve it in term one it's a it's an even braver one who tries to resolve it in term two right because that's gonna be your legacy and so we're left with something I heard on a Mark podcast the other day that Obama was saying, which is, you know, the world is complex.

17:21Simon Marshall:And sometimes we have to just be happy with the smaller wins. And I think that if managing partners saw it as I'm going to be in for two terms, I want to evolve comp from here to over there, I'm going to take two or three goes at this to get it over where it needs to be. That may well be what Obama would have done in that situation. If you get a chance to listen to that, it's an incredible podcast, one of the greatest ever episodes of a podcast, right? and he shows you there's practical and you win and you take everyone with you as you go so Rob I think that might be the solution I think if you if it were a revolution I think you'd lose the partnership and you probably only get one term I love that and your mentor said to me before you

17:58Rob Hanna:know grow as you go it's kind of similar mirroring that actually and look how you've done on the back

18:04Simon Marshall:of that advice right I mean it's not small advice if we just started out today said to you four years ago rob can you do this thing this way you'd be like wait that's just that is a sharp like yeah yeah it's true right so it's good advice yeah no absolutely um again sticking

18:19Rob Hanna:with stats and data because you've put some huge amount of hours into actually putting this all together you know again quite striking stuff you know practice and sector leads score that even lower so that was 1.3 out of 10 that feels quite telling i know you've been touching on a few of these points but giving you a chance to really hammer home any messages you'd like to The people helping to drive basically the growth, the strategy, often feeling least recognized. So what does that say about how these modern firms reward the leadership beyond billings?

18:48Simon Marshall:There's a lot going on behind that statistic, Rob. 1.3 out of 10, happy with comp when they work in a sector role or in a practice level role versus 2.6 for the broader partnership. right and another statistic that we're going to talk about as well you know almost one in four saying they rank it zero out of ten right i mean it's pretty it's pretty damning right so 1.3 for these guys what's going on so one is i don't i don't think they always feel seen right which is really weird they're in these roles and they feel like i i am carrying the weight here of a i mean you know some of these um these incredible women and men go out and do these amazing jobs and bring in you know profiling and bringing lots of client opportunities for a broad range of partners and they think that the effort and the lifestyle they have is disproportionate and the reward they get is disproportionate to the lifestyle they lead in a lot of it but the other thing to remember is because this is also about how happy they are with the management team I think they're also the pretenders to the crown Rob these are the people who are probably going to be the next ones to make it into that role if you go and look at the pool of talent that you'd like to draw on to become the people who are going to be up for the next managing partner election if they're chosen out with that group that's almost a sign that they're rejecting the firm's strategy and vision i think a little bit or to some extent and so and that distance there that 1.3 out of 10 i think speaks to um i've actually been up close rob and i can see what you're doing inside your business and i think that we could i could do it better right who knew some powerful intelligent people saying i could do it better right and that i think that will resonate with a lot of your listeners I think we shouldn't add too much weight to the fact that they score it lower than the other partners on average.

20:31Simon Marshall:I think it's an easy headline, but I think it's complex as to the answer. There's fewer of them. And I think that, as I say, for the reasons they may feel as though they're disproportionately not rewarded for what they do. And they want to get their hands on the crown as well. In the Game of Thrones, it is a law firm leadership contest as well. I would say you should be slightly careful about what you wish for. that 1.3 may drift north when you suddenly realize what the managing partner has to do instead of being a sector lead right so i would i would be mindful of that yeah be careful what do you say rob everybody wants to everybody wants to private jet nobody wants to do the work it takes to get

21:06Rob Hanna:there right yeah everyone's jealous of what you've got no one's jealous of how you got there right lifestyle you have to lead right yeah it's so true i mean again we're sort of really going into this which I'm enjoying, you know, that gap between equity and salaried partners, you know, is standing out to me, you know, the equity partners feel far more connected to their firms than perhaps salaried partners. So has salaried partnership become too ambiguous in too many firms and too much responsibility, not enough influence, clarity or security? What do you say to that?

21:38Simon Marshall:Yeah, I mean, how long have you got, right? I really believe that this is the crux it like, if we puzzled out loud Rob like what do we do with the salary dwell do we get rid of it right do we do we call it something else right does salary partner actually mean something different nowadays are you the new associate director right because I think we expect things of salary partners that are probably unreasonable given um the relative pay versus equity partners I genuinely think there's a challenge there for firms to sell that on um some firms I think would be better off re-equitizing the partnership coming down a bit and then being honest with some people about look you're going to be salaried until your pqb plus 15 but look we're going to pay you very well but we're not going to expect you to do some of these other things as well so rob yeah i think that i think it has become ambiguous and it differs from firm to firm so if you say you're a partner that slaughters that's always meant something different to other firms so it's a bit of an unfair comparison but it is a different proposition to i'm not going to name another firm but a much smaller firm where a salaried partner may be expected to just be really really good technically and ask to back up the ep when it comes to actually delivering um good work and some other places though um you know i've seen i've worked in teams where you know there are pqe plus twos that are bringing in clients and doing things that some sps would not be doing at other firms as well so i think the whole of that drag has become a bit more ambiguous but particularly in that sp group of you know you're in but you're kind of like still on the outside what what what i'm also

23:12Rob Hanna:seeing picking up on what you're saying there about some associates i think there's some incredibly talented business development focus associates that are growing their own practices some actually bringing in more than partners in other other firms even at that that that level it's actually then also getting the firms to want to wrap around those and believe those and give them the opportunity to grow their practice so they don't have to look elsewhere i'm seeing you know managing associates associates that you know are not getting that support for whatever reason it might be in terms of not being open to change and actually you know i'm talking sort of five six seven eight hundred thousand pounds worth of you know revenue here which potentially is going to get ported to another firm because they're not backing or understanding or seeing that future talent come through that's maybe a separate conversation but i'm definitely seeing right

23:53Simon Marshall:because you know the system that was there to recognize that element i've got some things lined up on this to talk about as well but those systems there what we saw over the years was quite a few of those salary partners or junior exe partners would claim credit for something because they had to because they had to put the numbers on the board but a senior associate or an ad had brought in or maybe a managing associate instead the managing associates are then thinking well i'm not going to be incentivized and you're not going to put me into the partnership that's i guess i've got a friend who's um uh they made head of something recently as well like and and And I remember that being in their past, as it were, as well.

24:27Simon Marshall:They didn't get the recognition for some things that they'd done. And then they skipped firm. And the firm, I think, still probably doesn't know why or understand why as well. Again, I refer you back to that Buffett quote. But be careful what you rule people. It wouldn't happen if you're in a corporate, Bob. If you're in a corporate, different things would happen. But this wouldn't happen because we would say, look, why wouldn't we pay a 27-year-old £500 ,000 a year if they're bringing in 4 million quid? What are we talking about? Of course, they can have a bonus or they can do something. Rob, there would be a way and it must be possible in the modern era to reward those MAs who you don't want to join the partnership.

25:06Simon Marshall:You're not ready for that yet, but you do get a reward financially for the thing that you did that made a material difference. And it doesn't have to be a year on year commitment. It can just be a one off special payment. Say thank you for what you did over here. I don't see any issue with that.

25:20Rob Hanna:No, I think, you know, and to your point, you know, people will do their talking with the sound of their feet. otherwise you know gone are the days where people i'm seeing this you know people aren't prepared to sit it out you know it's always been just sit here for two or three or four i think that mindset's gone now people are people are being a lot more proactive or trying to take ownership of their own careers particularly the ma's i'm talking to you like rob yes i could stay here and wait but i am proactively pushing to look at other options elsewhere because there will be a firm that will recognize this that will want me that will want to support it um i'm case by case basis but i guess this is very sort of passionate to me because it's something i'm working on currently you know with someone i think is you know that's a huge cost to the firm just not in terms of recruitment fees but potentially going to lose for just not recognizing and seeing the talent that's before their eyes it really is quite striking yeah we've got to start looking at