Take a deep breath. The reporting of year-end figures has kicked off. Here are some predictions. This will be a record year for much of the City. At least 10 firms will gift their top partners more than a million for the first time and be able to put two fingers up to the Americans.
Litigation firms will continue to do badly. If the head of the Commercial Court is reduced to sending out a begging letter to chambers (as we report today, see page 1), then you know things are dire.
There will be the usual quibbling over equity partner numbers. This is despite the fact that we all know which highly profitable firms have small equity partnerships – DLA Piper, BLP, Herbert Smith, to name but three. But there’s no reason for these firms to reshape their practices according to critical orthodoxy, particularly when virtually every firm in the top 100 has shaved its equity partner numbers.
Some firms will blame mediocre performance on currency fluctuations, and some will even try and bring up the old chestnut of revaluation of work in progress. This will be tedious.
Some will attack PEP as a measurement. Actually, we’ve always said as much ourselves. The Lawyer has always looked at PEP, profit per partner (inclusive of all partners), revenue per qualified lawyer, revenue per fee-earner and so on. So if you want a contextualised discussion, then wait until The Lawyer 200 in early September.
Someone in the national press will use the phrase ‘fat cats’. This will be predictably condemned by City lawyers as the politics of envy.
Too few people will contrast the riches of the commercial legal profession with the impending disaster in the legal aid sector.
Smaller firms will get a little more limelight on the back of our expanded Lawyer 200, which will give for the first time a comprehensive picture of the commercial legal profession. Partners at larger firms will be surprised at the good living to be made at smaller practices.
The wealthiest partners will not be at Slaughters, but at the specialist personal injury factories, which, post-Clementi, hint at the future of the legal profession.
Lastly, partners may be richer, but they won’t be any happier.