City lawyers have more chance of earning a million with UK firms than with US firms – despite the Americans' much-vaunted recruitment drive.
Only two City lawyers at US firms are understood to earn more than a million pounds – Andrew Wilkinson at Cadwalader Wickersham & Taft, and William Charnley at McDermott Will & Emery.
Both declined to comment, but they prove the value of making the right career move at the right time.
At just over £1m, Wilkinson's earnings outstrip his former colleagues at Clifford Chance by some £200,000, while Charnley's package – which also just edges over a million – is about three times more than he would have got at Simmons & Simmons, and four times more than he would have earned at Addleshaw Booth & Co.
Neither Cadwalader nor McDermotts operate a lockstep – Wilkinson's and Charnley's packages are understood to include specific bonus entitlements as well as straight profits.
And indeed, until the likes of Cravath Swaine & Moore, Davis Polk & Wardwell and Simpson Thacher & Bartlett embark on a UK partner recruitment drive, it seems that UK lawyers at US firms will not match magic circle levels.
By contrast, there are 61 partners at UK magic circle firms earning over £1m a year. The 40 partners at the top of the equity at Slaughter and May each make £1.2m. These include such luminaries as corporate partner Michael Pescod, competition partner Malcolm Nicholson and corporate partner Nigel Boardman.
Long hailed as the most profitable firm in the City, Slaughters' concentration on premium billing, rather than volume service, has paid off – its lack of overheads when it comes to a global network has also helped the bottom line.
But it's not just partners of 10 years' seniority and above who are millionaires. Slaughters had such an extraordinary year that even nine-year partners – including Andrew Balfour, Mark Horton and Elizabeth Barrett – tip over into seven figures. They are understood to be on £1.08m – equivalent to 15-year partners at Allen & Overy. Meanwhile, first-year partners at the firm have leapt from some £100,000 as senior assistant to £600,000 – a dizzying transition.
At Allen & Overy, 16 partners have reached the magic million figure. These include managing partner John Rink, litigation partner David Mackie QC and banking partner Philip Wood, plus Guido Brosio and Roberto Casati, former name partners of Brosio and Casati (who clearly negotiated a nice deal with Allen & Overy by coming in right at the top of the equity).
The profits share-out for last year also includes former senior partner Bill Tudor John. It is fitting that in his last year at the firm Tudor John attained his ambition for top partners to make a million.
The reason for the relative paucity of partners on over £1m at Allen & Overy is because of the firm's abnormally long partnership track. It may be only two-and-a-half to one, but it takes 15 years (and before that, two years' apprenticeship as a salaried partner) to reach the top, with partners advancing at a snail's pace of two points every year. Even senior partner Guy Beringer has not yet reached the top of the track.
While sources say that there is some recognition within the firm that the length of the partnership track will have to be shortened, few expect this to happen in the near future. 'There's been too much navel-gazing already,' says a partner, alluding to the change in management and partnership deed.
Although top Linklaters partners have not made it over a million, they are not far off, at £925,000, while the average profits per partner is £710,000.
This is hardly surprising, considering the raft of top-line deals, such as the defence of NatWest and the merger of Vodafone and Mannesmann, they have advised on.
Meanwhile, Clifford Chance and Freshfields – the two firms which have invested most in a global network – achieved rough parity. At the top end, Freshfields partners made £810,000 and Clifford Chance partners £804,000. Although both operate a fixed lockstep, in the US Clifford Chance Rogers & Wells have accommodated star billers such as Kevin Arquit, whose compensation is believed to be several millions.
The Clifford Chance figures are complicated by the fact that the profits are derived from two separate sums. The first set is the eight months from 1 May 1999 to 31 December 1999, and the rest of the profits are derived from an amalgam of fees from all three firms.
Although partner compensation has rocketed, senior assistant pay – despite the recent hikes initiated by Clifford Chance – has essentially remained static. With very few exceptions, top City assistants are in the £90,000 to £120,000 bracket. And with City leverage ratios getting higher and partnership an increasingly dim prospect for many, the first-year partner profit figures may spark some discontent in the ranks.