Equity partners average £65,000 – less than their fixed-share comrades
Tumbling profits at Blake Lapthorn have led to some of the firm’s equity partners taking home less than the junior lawyers they supervise.
In what has been a dismal financial reporting season across the legal profession, the south coast firm has seen average profit per equity partner (PEP) fall by 68 per cent from £204,000 in 2007-08 to £65,000 this year.
It is understood that a small number of Blake Lapthorn associates take home more than £65,000, while fixed-share partners can earn between £80,000 and £150,000.
In an interview with The Lawyer, managing partner Walter Cha said the firm’s underlying PEP was £130,000. However, Cha admitted that this figure did not include a number of exceptional items, such as the firm’s move into new headquarters and payoffs to staff in two rounds of redundancies.
“Equity partners take the rough with the smooth,” added Cha. “In better times they get a better return.”
As well as moving into new headquarters in Southampton, Blake Lapthorn is still paying around £400,000 in rent on its old offices, which are now vacant. It still has around 18 months remaining on the lease and has so far been unable to sublet the property.
The firm has been through two redundancy programmes, leading to the loss of 53 jobs, including fee-earners. It has also emerged that partners at Blake Lapthorn have poured additional capital into the firm over the past two years.
Equity partners were asked to put in £30,000 and fixed-share partners an additional £60,000 in May 2008. In May this year equity partners provided another £100,000 and fixed-share partners £60,000.
Cha said: “We did restructure our capital. That was a consequence of partners leaving – that capital had to be replaced.”
The majority of firms in the UK 200 have been hit by profit falls in the 2008-09 financial year. Blake Lapthorn’s turnover also fell by 2.8 per cent, from £50.7m to £47.9m.