Are international firms increasingly using the title 'counsel' to provide an extra career path for their lawyers or an extra weapon in their business development agendas? ALB finds that the truthful answer varies from firm to firm and lawyer to lawyer...

If building capacity with lateral hires and partner relocations will be considered as one trend among international firms in 2010, then en-masse counsel promotions must be another. In January alone a significant number of international firms either promoted senior associates to counsel or made lateral counsel hires.

Clifford Chance, Davis Polk, DLA Piper, Latham & Watkins and Vinson & Elkins, to name a just few, have all promoted lawyers to counsel. The principle motivation for firms to elect lawyers to counsel - a rank between senior associate and partner - is obvious: recognizing their outstanding performance and contribution to the firms.

"In our firm, counsel promotion is the management committee's recognition of specific senior associates who have distinguished themselves with expertise in a certain area of law, and have demonstrated excellence in practising law. It's a compliment to their skills and capability," said Jay Cuclis, a member of Vinson & Elkins' management committee and the head of the firm's Asia practice. Vinson & Elkins formally adopted the counsel program firm-wide in 2006, when it promoted 40 senior associates to counsel globally.

In January this year, the firm announced the promotion of Beijing senior associate Nicholas Song to counsel - the first counsel in its China offices. Song, who joined the firm in 2000, focuses his practice on international arbitration and dispute resolution matters. "The role of counsel is to help manage clients' legal matters and supervise and mentor junior lawyers. On a regular, ad hoc basis, we consider whether certain lawyers should be elected to counsel," said Cuclis.

Stopover or destination?
As every firm classifies the career potential and responsibilities of the counsel role differently, it is sometimes unclear whether the position is a stepping stone, or an alternative, to partnership.

At Vinson & Elkins, any counsel could be at any time elevated to partner, and equally, some associates will be considered directly for partnership. "Counsel is not necessarily an intervening step in the partner promotion process, but rather a designation for certain associates to play a greater role," said Cuclis.

Lovells, on the other hand, uses the position as part of its promotion ladder, often for people who have partnership potential but aren't quite ready. However, in principle, senior associates are still able to move straight into the partnership. "As practice evolves, it's normal for lawyers to come through to counsel. From a client's perspective, it suggests a level of seniority and it's a good thing to deal with someone more senior. It's also good for the individual lawyer who wants to feel his achievement being recognised," said Jamie Barr, Lovells' head of corporate in Asia.

Barr also sees the counsel position as a good intermediate step for top talent who are on track for partnership. "A partner's job is very different from that of an associate. It involves more management, business development and client management. Bringing top-flight lawyers through to this intermediate step makes it easier for them to undertake business development, helps them gain the confidence of their clients, and prepares them for the next step," said Barr.

At Lovells, counsel and consultants are involved not only in front-line transactional advisory work but also with certain department and client responsibilities. Currently, the firm has 14 counsel and consultants in Greater China (nine in Hong Kong, four in Shanghai and one in Beijing). Barr said a number of candidates for the upcoming round of partner promotions in Asia were in counsel and consultant positions.

At other firms, counsel can be a title for lawyers who want more flexibility with work schedules than partnership offers; associates that are not interested in the partner track; or senior lawyers coming to a firm from public service or corporations who have no business.

Economic realities
It's debatable whether one designation is better than another, but promotions need to be justified by the business environment as firms become savvier about profitability. The contributions of senior non-partners are increasingly recognised as critical to a firm's financial well-being. As long as the role makes sense in financial terms, counsel will have strength and prestige in the firm hierarchy.

 "When the pressure for business origination is high, firms will want to have more people actively involved in business development. The counsel role allows more senior lawyers to build a book of business," said Frazer Xia, the founder and managing director of leading legal recruitment firm China Legal Career.

"Profit per partner (PEP) is also an essential concern when it comes to partner promotion. If a firm expands its partnership too quickly, its PPP may be diluted. So when firms are not so comfortable about promoting someone to the partnership immediately, they can appoint the lawyer to counsel first," Xia said.

Having the role of 'counsel' can clearly have a favourable impact on a firm's bottom line: charge-out-rates for counsel are generally higher than those of senior associates and in some cases can approach that of junior partners.

A former counsel at a magic circle firm's Shanghai office who is now a partner of a PRC firm provided a case in point. The source told ALB China that when he was counsel his hourly rate was up to US$200 higher than some of the senior associates. "Counsels are more like partners than associates; they could have their own clients, manage their own cases and participate in certain management tasks. They contribute considerably to firms' revenues without having a share in the profits," he said.

According to another leading international legal recruitment firm, the remuneration packages for counsel in different firms vary vastly. The salary range for counsel who are on track to partnership in US top 50 firms can be anywhere from US$250k to US$400k. However, in some cases a permanent counsel who doesn't want to become partner and doesn't do business development can earn up to US$600k due to his important role and seniority in a firm. Nevertheless, these figures are significantly lower than what senior partners can earn.

The source also witnessed the trend towards a widening use of counsel roles in the Asia offices of some international firms. "A few years ago, international firms tended to promote senior associates directly to partners in Asia. But using the counsel role as a transition to partnership seems the obvious route now," he said.

As the prospects for 2010 brighten it's reasonable to expect that the count of counsel in international firms will grow in line with that of associates and partners. In some cases this will be a good thing for lawyer, firm and client alike; in others, it will not. ALB