Titmuss Sainer Dechert will this year have to pay its Philadelphia-based partner a proportion of its record £7.4m profits because it has outstripped it in profit growth.
Titmuss and 442-lawyer Dechert Price & Rhoads effectively reward each other for work referral by making annual “transfer payments” based on a secret formula that depends on the relative profitability increase of the two firms.
The arrangement is designed to make the firms work closer together than they could if they simply commission on a deal by deal basis. But the two firms have avoided full profit sharing because it is complicated by US state Bar rules and insurance cover issues.
Titmuss senior partner Steven Fogel refused to say whether this was the first year it had made payments to Decherts but he confirmed that last year Decherts paid Titmuss. He said: “This is regarded by Titmuss Sainer Dechert as an achievement since Dechert Price & Rhoads itself had a record year.”
His firm has seen an increase in turnover of 14 per cent and a record increase in profits of 24 per cent over the last year.
The figures compare with an average increase in turnover at the two firms of 18 per cent and of profits by 22 per cent.
The two firms agreed earlier this year to extend their alliance until June 2001.
The only other UK firm to have set up close financial links with a US firm is City practice Hobson Audley Hopkins & Webb. In July 1997 it set up a separate multinational partnership (MNP) with Minneapolis-based Faegre & Benson.
London based MNP, Faegre Benson Hobson Audley, is a full partnership with profit sharing.