Acumen+giving+you+the+edge

Editor's weekly: Greed is good

15 July 2010 | By Husnara Begum

  • Print
  • Comments (2)

Related Articles

Those of you who have been keeping a close eye on Lawyer2B.com and its sister site TheLawyer.com won’t have failed to notice how partner profits at many of the UK’s leading law firms have suddenly bounced back in spite of ongoing economic woes.

National firm Shoosmiths, for instance, stunned its rivals earlier this week by posting an eye-watering 83 per cent hike in net profit for the 2009-10 financial year with average profit per equity partner (PEP) rising by 69.5 per cent for the same period (read more).

LG, Travers Smith and Withers, meanwhile, posted PEP rises of 64, 53 and 31 per cent respectively.

What’s so surprising about these figures is that they were achieved against falling or static revenue. Shoosmiths’ revenue for example fell by 9 per cent to £90m. Indeed, as exclusively reported by TheLawyer.com on Monday (12 July) the total revenue generated by the UK’s top 30 law firms fell by half a billion pounds last year. In 2008-09 the total revenue of the UK top 30 stood at £11.36bn. Last year that fell by 4.5 per cent to £10.84bn.

So why then have two-thirds of these firms seen a rise in PEP? It’s simple aggressive cost cutting namely in the form of office closures, redundancies, four-day weeks, pay cuts, outsourcing and trainee deferrals.

It’s therefore no wonder that the figures have sparked outrage among many of our readers. “Once upon a time law was a profession. Now it is the preserve of a venal, disgraceful, pathetic oligarchy who have scrambled up the stepladder before kicking it away. I wonder how many good lawyers will walk away from the law as a direct result. In 20 years’ time we might be seeing a crisis of intelligence. Unfortunately, the current partners will not care, as they will have made their stash,” writes one user.

Indeed, one has to ask whether at a time when most of us are having to cutback is it morally acceptable for partners to make so much money and what’s more can it be sustained? Now there’s a good question to ask at your training contract interview!

husnara.begum@lawyer2b.com

See all Related Jobs, Briefings & CPD/Events

Readers' comments (2)

  • Anonymous | 15-Jul-2010 2:45 pm

    Dear Ms Begum,

    I write in response to your article on the huge profits the law firms are making inspite of the "grrreat economic delivery" that never was - the Editor's weekly, The Lawyer2B.Com of 15 July 2010. The law firms are perfectly entitled to whatever they make. If you work hard then you are entitled to the fruits of your labour. Your readers are clearly misguided in their reasoning. I am fed up with the silly complaints some people come up with. "High earners should be punished." "Footballers should be deported to Australia." Even Alistair Darling joined in and decreed that high earners should be ashamed of themselves. But why should a worker be punished for earning his/her keep? What is wrong with hard work? If an employer or a client decided that I am worth fifty million pounds per hour why should there be an outcry against it. Why should I settle for life on benefits after reading for a law or any other degree? Your readers have nothing better to do. The law firms and their partners are entitled to whatever profit they have worked so hard for.

    Unsuitable or offensive? Report this comment

  • Anonymous | 16-Jul-2010 9:50 am

    To the above poster - you are completely missing the point of the article.

    No one is declaring that lawyers shouldn't be rewarded for their hard work, but when the partner profits come at the expense of junior lawyers jobs then there is a problem. It is blatantly apparent that PEP has jumped this year, despite falling revenues, due to rafts of redundancies. I'm reiterating this as you obviously didn't pay a great deal of attention to the article before you began your misinformed rant.

    Put simply, profits didn't increase because of an increase in hard work, they increased because of increasing greed within the legal industry.

    Unsuitable or offensive? Report this comment

Have your say

Mandatory Required Fields

  • Print
  • Comments (2)

Most popular

Most commented

Most emailed