Allen & Overy (A&O) plateau partners are the richest in the City, with profits of £1.05m – overtaking Slaughter and May for the first time.
A&O’s figures are skewed by its exceptionally long 15-year lockstep, but the firm still posted a slight decline in its average profits per equity partner this year of £675,000 – down from £685,000.
Lovells and Linklaters plateau partners will have been among the happiest in the City. They saw a rise of 3.8 and 7.1 per cent respectively. Linklaters, which had fallen behind Freshfields Bruckhaus Deringer last year, claims to have clawed back profitability due to a strong performance in its finance department.
plateau partners have seen a decline, from £815,000 to £734,000, or 9.9 per cent – the second biggest drop in the top 10 after Simmons & Simmons. However, Clifford Chance could boost top partners’ profits in key juris-dictions such as the US if recommendations from the compensation review com-mittee are endorsed by the partnership. The firm is considering the option of setting aside 600 extra points in 50-unit chunks, effectively allowing up to 12 partners to be remunerated according to local norms. On the current 100-point lockstep, a 150-point Clifford Chance partner could therefore make up to £1.1m – a figure more in line with New York pay.
Most of the firms in the table operate relatively traditional lockstep or modified lockstep.
However, DLA – the most conspicuous challenger for top 10 status – has a small equity partnership with a merit-based profit share-out, meaning that the spread between top and bottom is higher. In the last financial year the spread at DLA allowed top equity partners to earn £860,000, compared with £240,000 at the bottom.
Addleshaw Goddard has spun off its bulk housing arm Enact through a management buyout. As reported by The Lawyer (16 June), the firm planned to spin off Enact because it did not fit its strategic direction. Addleshaws is taking a small, undisclosed equity stake in the business and will retain a place on the board.