It is ultimately the ratio of the partners: associates, not the demand by LPC graduates or the SRA, which is the bottleneck in legal training. According to news just published, Baker & McKenzie has just posted a 2.1 percent rise in global revenue for the 2011-12 financial year, taking total income to a record $2.3bn. This means that Baker & McKenzie, which has a June year-end, has retained its title as the world’s largest law firm by turnover, usurping DLA Piper and Skadden Arps Slate Meagher & Flom, which turned over $2.24bn and $2.16bn respectively in calendar year 2011.

Also recently, two privately owned law schools have bucked the UK-wide trend of fewer students applying for university places by reporting a ‘surge in applications’ for their LL.B law degree courses.  BPP University College says it has seen a 79% increase in applications for its law degrees, while the College of Law has reported 50% more applications than expected for its new two-year law degree, due to start in September 2012. These figures contrast with reports that UK applications across all university subjects are down 8.7% compared with last year.  The College of Law, meanwhile, said that its new two-year LL.B law degree has so far attracted more than 600 applications, which is 50% more than the 400 expected. Some 200 to 250 students are predicted to enrol.

Meanwhile, an open letter dated 3 May 2012, had begun like this:

“We are a few of the thousands of students who have passed the LPC exam and are desperately waiting for training contracts. We and many of our other friends have been applying for training contracts for over two years since passing the LPC but without success. Some of us have made more than 300 applications and very few firms invited us for interviews but we have not been successful.”

So why don’t law firms simply take on more trainees, “if they can afford to”? It is a different argument to explain why very profitable City firms restrain the number of big clients that they have simply because clients may simply not be able to afford their firms’ fees, in some cases estimated initially by Partners. An official reason, given here by Elisabeth Baitay, a Partner in Finance at Bingham, is as follows:

“One is that we don’t offer training contracts to 60 or 80 trainees per intake; we take on between two and four people. This means that the trainees are actually, as a group, much more cohesive. They also tend to get much better work, much faster. We don’t have a department where you’ve got six trainees, and you’re either lucky or you’re not lucky in terms of who you sit with and whether you get work. In this environment, everyone gets work and everyone gets good exposure quickly.”

Battay is one of the firm’s graduate recruitment partners, which means she plays a vital role in the selection, supervision and development of trainees. In reality, the more traditional reason given is that City firms are reluctant to train-up so many trainees themselves ‘on their patch’, just to see they become absorbed in lateral recruitment to competing law firms; such trainees can often take with them valuable skills and knowledge. In the City, there is also the added issue about how lawyers can take with them (not physically) confidential knowledge or know-how about how their clients ‘do business’, and of course it would be a breach of the SRA Code of Code to abuse this trust of the lawyer-client relationship through breach of principles such as confidentiality and conflicts-of-interest.

City law firms, both U.S. and U.K., are definitely more obsessed about their profitability, than contributing to the Legal Education and Training Review, which yesterday, through the report of Prof. Julian Webb, suggested that students had ‘gaps’ in their knowledge of ‘commercial awareness’ (without actually defining what ‘commercial awareness’ is, and what these gaps are possibly.)

The RULES, developed by the late Robert J. Arndt in the 1990s, enable firms to evaluate profitability by looking at: