Shaw Pittman has reported a 34.5 per cent hike in profit per equity partner (PEP) to $740,000 (£392,000) ahead of its merger with Pillsbury Winthrop.
This sees the firm significantly close the profit gap with Pillsbury, which has itself revamped its compensation system to shore up profit.
Pillsbury’s 2004 gross revenues were stable, up 2.3 per cent to $423.5m (£224.1m), and PEP was up 4.4 per cent to $777,600 (£412,000).
Shaw Pittman’s PEP shot up following a rash of departing partners. Gross revenues were up just 1.3 per cent to $192m (£101.6m).
Meanwhile, Pillsbury has extended its lower two tiers of partners, who are on a fixed payment scheme, to four tiers. Senior partners in the six stages above that now fit into eight stages.
Pillsbury chair Mary Cranston told The Lawyer: “The change has been made in response to competitive pressures. Many national competitors have done this. It means that a greater percentage of your income is fixed.”
As first revealed on last week’s Lawyer News Weekly email, the firm is also keen to find a UK merger partner. Pillsbury Winthrop Shaw Pittman vice-chair Stephen Huttler told The Lawyer: “We think that our combined strength and Shaw Pittman’s strong brand in London will facilitate that sort of expansion, which we wouldn’t have been able to do as single entities.”