Up Or Out Or....

A radical repudiation of a time-tested model or a long overdue dose of sanity?

One imagines those are the reactions to Allen & Overy's revealing that it's considering a third career path for associates, neither "up" nor "out," but "director."

A bit of context:  A&O's head of leveraged finance, Tony Keal, a partner there for 23 years and "widely regarded" as one of the top LBO lawyers in Europe, recently jumped ship to Simpson-Thacher.  Not known for his reticence, last June Keal had sent an email to the entire A&O banking group grumbling that associates' salaries were lagging the market and that the "carrot" of partnership was no longer what it used to be given pressures to keep the ranks of those with full equity small.  The result, predictably, was neither to increase the likelihood of associates' being promoted to full partner nor to inspire across-the-board raises, but rather to raise the issue of dissatisfied associates in a rather public way.

Coincidentally, A&O just happened to have recently concluded its triennial survey of all staff, and has also received feedback from an "Associates Forum" citing opaque career prospects, lack of guidance and feedback, and worries that their pay is, indeed, lagging peers.

All this has led to A&O "actively considering" setting up a director role as a third way for associates—a sort of long-term super-senior associate position with, presumably, little or no prospect of partnership but also little or no prospect of being invited to leave assuming the requisite level of performance is sustained.

Only in our industry do we take trained professionals who are highly productive, profitable, and conscientious, and rudely show them the door just as their careers are poised to take off.  Imagine an alternative.