Top of equity: Firms break into millionaires’ club as partner earnings rise

Largest membership since 2008 as Ashurst reappears and Clydes joins

The number of firms with partners earning more than £1m now stands at 18 – the largest amount since 2008.

As one would expect, the magic circle have comfortably inhabited that category for half a decade (although Clifford Chance slipped out of the millionaires’ club in 2008-09, when top partners received a profit share of £870,000.

In 2008-09, the most difficult year for the commercial legal profession, just eight firms – Allen & Overy, Berwin Leighton Paisner, DLA Piper, Freshfields Bruckhaus Deringer, Gordons, Linklaters, Macfarlanes and Slaughter and May – paid their top ­partners more than £1m.

No one firm model ­dominates the million-pound club; there is a wide variety of firms, from multi-jurisdictional giants to ­boutique practices.

Ashurst, which as The Lawyer reported last week has been actively managing its equity distribution and has moved 17 partners down the profits ladder, has ­partners on more than £1m for the first time since 2008.

Clyde & Co appears for the first time, while Eversheds is on the verge of breaking the million-pound barrier, with top partners making £967,000.

At the other end of the size scale, Stewarts Law, the niche litigation player whose PEP this year stood at £926,000, nestles between Travers Smith and Clyde & Co.

Top-paid partners at private equity boutique ­Dickson Minto (£1.5m) even managed to best those at Freshfields Bruckhaus Deringer (£1.475m).

Yorkshire firm Gordons, where PEP was £888,000 and where the equity is shared between nine ­partners out of a total of 31, has consistently made the million-pound club for the past five years.

Boutiques have tended to do well on this benchmark; pensions specialist Sacker & Partners, which made it in 2007-08 and 2008-09, hovers just below at £920,000, one place above Norton Rose.

The million-pound table this year sees the intriguing renaissance of the silver circle – the term coined by The Lawyer back in 2005 to describe that group of ­largely domestic-focused firms with strengths in ­corporate (usually private equity) and real estate and which are not constrained by lockstep.

This year, top partners at BLP, Travers Smith, Macfarlanes and SJ Berwin all drew profits of more than £1m. Of similar profile is Watson Farley & Williams, whose low costs and financing/energy niche has yielded dividends for top partners in the past two years.

It is worth noting that another midmarket firm, Stephenson Harwood, is able to pay its top partners £852,000 – more than Hogan Lovells and Simmons & Simmons.

Click table below to view TOP OF EQUITY 2010-11