Freshfields Bruckhaus Deringer PEP surges 39 per cent

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  • Freshfields PEP

    Call me a cynic, but has the fact that Freshfields PEP has gone up 39 per cent got anything to with getting rid of 100 equity partners?

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  • Remember...

    ...that if you take the exchange rate from last year, then the percentage increase on turnover is only around 9-10 %.

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  • Freshfields

    Very impressive results, especially when you consider that Freshfields don't massage their numbers by making a huge chunk of their partnership non-equity like some of the other usual suspects (Herbert Smith and CC being the worst offenders!).

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  • Cynic or not

    Of course the cut in equity partners has had an effect, and this argument would be very valid if the percentage was high but the PEP figure low. What's more, the profit margin is much more impressive than that at CC. I don't think any City partner could deny that a PEP of 1.4 million is pretty impressive.

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  • Exchange rate complications

    These numbers are seriously tricksy given the drop of sterling against the euro and FBD's proportionately much higher relative euro income than, say, CC due to its size in Germany.

    An 'average' German partner would have taken home €1.514m last year at the then prevailing exchange rate. This year he will take home €1.800m. That's an 18% increase. That is not to be sniffed at but it is a lot lower than 40%!

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  • average and top equity

    Although exchange rates have made a big difference the key factor is keeping equity tight. Freshfields has made far too few partners up over the last few years as well as shedding large numbers. This is a difficult model to sustain. When more of the numbers come out ,compare the top of the equity with the average and you will see a smaller difference for Freshfields than other magic circle firms. This points to problems ahead.

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  • Flawed figures - why not standardise them?

    Would it be too much to ask for the ridiculous figure of profits per equity partner to be done away with? The discussion on this board shows just how utterly meaningless such a figure is.

    Any firm can boost their PEP simply by de-equitising hordes of partners or making up lots but leaving them salaried. If you're going to bother having a one-stop figure for comparison purposes, you may as well have revenue per partner (which was the direction you very sensibly started moving in last year).

    Unless you have a standardised measure which actually shows how much business each partner has brought in, you might as well not bother. If someone is a partner, they should be included in the firm's headline figures. If the law firms aren't prepared to do that themselves, perhaps the legal press should?

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  • Don't be green

    Freshfields may well have reduced the number of partners, but it still has a leverage of 4:1, that is twice, e.g., Herbert Smith, which is more like 8:1 and better than most if not all of the top UK firms. Therefore there are no tricks here, just one hell of a profit-making powerhouse.

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  • Britannien uber alles!

    Regardless of discussion of exchange rates and de-equitised partners, the fact remains that for Freshfields' remaining partners, that's one mighty PEP, beating the likes of Davis Polk, Debevoise, Kirkland, Latham, Skadden and Weil as well as most City or German competition. In your face Uncle Sam!

    But at risk of sounding crass(er), what I really want to know is whether partners at Britain's Slaughter and May are going to beat those at America's Wachtell Lipton Rosen & Katz. Patriotism takes varied and strange forms...

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  • Partners make the money

    So to recap, the partners are making nigh on £1.5m, but they had to sack hundreds of support staff as an economy measure. And will the partners will be handing out a big bonus to the workers?

    No, I thought not.

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