No sooner had we surveyed the prospects for a talent war for associates among the AmLaw 200 than along comes the Financial Times reporting on the release in the UK of PwC's annual survey of law firm finances.  (I've requested a full copy by email to Alistair Rose, the London-based leader of PwC's professional partnership advisory group and the director behind it.)

The FT's rather Fleet Street headline for the piece is "Axing of partners sees top law firms increase profitability," but a more nuanced reading produces a less dire view.  Not to be blunt about it, but "de-equitisation" has been with us for awhile now, and PwC does not seem to report any sudden spike.  Rather, these are the trends that got my attention:

• Only one-quarter of the top 25 firms (this is all UK-land, remember) reported revenue increases of more than 10%; indeed, as Rose himself summarizes it, "It's not boom time. They haven't increased the top line. The main driver of increased profits per partner has been reduced headcounts."
• When you can't jumpstart revenue, you can squeeze costs.  And this seems to be happening as well; two years ago 72% of the firms reported staff overhead costs at more than 40% of revenue, but today that number is down to 44%.
• This may not,  however, be sustainable—bringing us to the potentially impending UK talent war.  From Rose's perspective, there is now "substantial pressure" for material pay raises for associates.
• Billable hour expectations continue to escalate, up over 20% in the past two years, although the alleged "target" of 1,545 hours per year would strike many associates on the island where I'm sitting as part-time.

The intangible is how to handle what are tactfully called "work-life balance issues:"

"The restrictions on creating new partners in recent years have also limited career progression for senior associates at law firms. The survey says that has required the firms to offer bigger bonus schemes and a wider range of flexible benefits in an effort to retain their fee-earners. Even so, almost two-thirds of the leading firms reported turn-over of associates running at a rate of more than 15 per cent a year."

So here we have the unstable confluence of:

• greater billing pressures (they may be less than here, but they're way above where they were there two years ago, and the concept of relative pain is genuine)

• no recent pay raises
• reduced prospects for partnership
• increasing attrition, and
• a resort to what sound like makeshift benefits/bonus schemes.

What's wrong with this picture?  Or, as my high school physics teacher might have characterized it in his honestly-come-by New Jersey accent:  "You can't play dis game fuh-evah."